BoE publishes FPC minutes: BoE has published the results of the Financial Policy Committee (FPC) meeting at the end of June. At the meeting FPC:
- directed PRA to implement, in relation to each major UK bank and building society on a consolidated basis, measures to:
- require it to hold sufficient Tier 1 capital to satisfy a minimum leverage ratio of 3%;
- ensure it ordinarily holds sufficient Tier 1 capital to satisfy a countercyclical leverage ratio buffer rate of 35% of its institution-specific countercyclical capital buffer rate; and
- ensure that if it is a Global Systemically Important Institution (G-SII) it ordinarily holds sufficient Tier 1 capital to satisfy a G-SII additional leverage ratio buffer rate of 35% of its G-SII buffer rate.
The minimum proportion of common equity Tier 1 capital institutions should hold is 75% in respect of the minimum leverage ratio requirement and 100% in respect of each of the countercyclical leverage ratio buffer and the G-SII additional leverage ratio buffer;
- recommended to PRA that in implementing the minimum leverage ratio requirement it specifies that additional Tier 1 capital should only count for these purposes if the relevant capital instruments specify a trigger event that occurs when the common equity Tier 1 capital ratio of the institution falls below a figure of not less than 7%;
- recommended that BoE, PRA and FCA work with firms to further improve cyber resilience; and
- set the countercyclical capital buffer rate for UK exposures at 0%.
(Source: BoE Publishes FPC Minutes)