On December 12, 2014, the PRA issued an updated version of its supervisory statement on credit risk mitigation, which sets out the PRA's expectations for the recognition of credit risk mitigation in the calculation of certain risk-weighted exposure amounts. The updated statement clarifies that the PRA does not expect a netting agreement to be an eligible form of credit risk mitigation under CRD IV, where a resolution authority is able to bail-in the liabilities in question on a gross basis. The PRA also does not expect that the legal effectiveness and enforceability of a netting agreement is negatively affected by a resolution authority having the power to bail-in those liabilities on a net basis only.

The updated supervisory statement is available at:

http://www.bankofengland.co.uk/pra/Documents/publications/ss/2013/ss1713.pdf.