PRA Buffers For UK Banks – One Size Doesn’t Fit All

The Prudential Regulation Authority (PRA)’s Pillar 2A and 2B buffers for UK banks will generate a far more nuanced and idiosyncratic set of end-state capital ratios, believes Jefferies.

Joseph Dickerson and team at Jefferies in their recent report on UK banks point out that the Prudential Regulation Authority’s August consultation paper on implementation of EU capital requirements known as CRD IV has driven substantial controversy around the end-state capital ratios of UK banks.

Pillar 2 provisions for UK banks

In August, PRA came out with a consultation paper titled “Strengthening capital standards: implementing CRD IV”.

Jefferies analysts point out that the proposed changes around Pillar 2...