Responding to the PRA's Policy Statement, Ruth Doubleday, Head of Prudential Regulation at the BSA, said:

“The BSA strongly welcomes today’s publication by the PRA of the ‘near final’ rules for Small Domestic Deposit-Takers (SDDTs).

“For too long, the full Basel framework has applied to all banks and building societies regardless of their size or complexity. The Basel framework is designed and calibrated for internationally active banks and was applied through the Capital Requirements Regulation in the EU to all deposit-takers. We strongly welcome the PRA developing this more tailored and simplified approach for non-systemic firms in the UK.

“Specifically, we welcome the approach that does not apply unnecessary rules to small firms, such as the countercyclical buffer which is relevant as a transmission mechanism to support the economy for systemic firms but is not relevant for non-systemic firms.

“Our attention now shifts to the implementation of the regime, and here it is for the whole industry to embrace the simplifications and resist any urge to goldplate the requirements on the false view that more complex approaches are somehow ‘best practice.’ It is for firms and advisors to unlearn old habits of complexity as much as for the PRA to ensure it does not revert to complexity or over-calibration over time through ‘supervisory creep.’”

[ENDS]

PS20/25 – The Strong and Simple Framework: The simplified capital regime for Small Domestic Deposit Takers (SDDTs) – near-final