The BSA response to CP6/23 supports the proposals to remove the capital deduction for non-performing exposures. We agree with the PRA's articulation that the current deduction approach is not the most appropriate nor effective means to address issues with NPE provisioning in the UK.

We believe this is a good example of where the PRA can now tailor the UK regime rather than follow the EU-wide approach. We encourage the PRA to look for other opportunities to remove requirements that were designed for the wider EU but that work less well in the UK as part of its Strong and Simple project.