The Bank of England's Prudential Regulation Authority (PRA) has paused and withdrawn a modification by consent it had offered to allow certain third-country covered bonds to be included in Level 2A high-quality liquid assets (HQLA) under the Liquidity Coverage Ratio (LCR) rules in the PRA Rulebook, subject to a cap on the amount recognised. The PRA withdrew the modification after receiving technical comments and requests for clarification, and will consider and address the points raised before clarifying its approach. In the meantime, firms are not expected to change how they recognise third-country covered bonds under the LCR (CRR) and Liquidity (CRR) Parts of the PRA Rulebook.
Bank of England 2025-04-17
Bank of England's Prudential Regulation Authority withdraws modification by consent on recognising certain third-country covered bonds as Level 2A HQLA in the LCR
The Bank of England's Prudential Regulation Authority (PRA) has withdrawn a modification allowing certain third-country covered bonds to be included in Level 2A high-quality liquid assets under the Liquidity Coverage Ratio rules. This decision follows technical comments and requests for clarification, with firms advised to maintain current recognition practices for these bonds in the interim.