Loss absorption amount and PRA buffer: Difference between pages

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''Bank resolution and recovery - capital adequacy''
''Capital adequacy - UK''.


The loss absorption amount is the component of a bank's Minimum Requirement for own funds and Eligible Liabilities (MREL) which is considered necessary to absorb losses up to and in resolution.
The PRA buffer is an amount of capital which UK-regulated banks are required to hold, determined following stress testing.


The amount is determined by the UK regulator, the Prudential Regulation Authority (PRA), following consultation with the regulated bank.


MREL itself comprises the total of a bank's:
*Loss absorption amount; and
*Recapitalisation amount.


Any PRA buffer which the regulator may set is additional to Individual Capital Guidance (ICG).


==See also==


*[[Capital adequacy]]
The PRA buffer replaced the former 'capital planning buffer'.
*[[MREL]]
 
*[[Recapitalisation amount]]
 
*[[Resolution]]
== See also ==
* [[Recovery]]
* [[Buffer]]
*[[Total Loss Absorbing Capacity]]
* [[Capital adequacy]]
* [[Idiosyncratic stress]]
* [[Individual Capital Guidance]]
* [[Pillar 2]]
* [[Prudential Regulation Authority]]
* [[Reverse stress test]]
* [[Scenario analysis]]
* [[Shock]]
* [[Stress]]

Revision as of 15:01, 29 October 2016

Capital adequacy - UK.

The PRA buffer is an amount of capital which UK-regulated banks are required to hold, determined following stress testing.

The amount is determined by the UK regulator, the Prudential Regulation Authority (PRA), following consultation with the regulated bank.


Any PRA buffer which the regulator may set is additional to Individual Capital Guidance (ICG).


The PRA buffer replaced the former 'capital planning buffer'.


See also