Regulatory Alerts2026-08-03
Added
Circular on matters relating to the use of implicit support
The Prudential Authority prohibits banks using the internal ratings-based approach from incorporating implicit support assumptions in credit risk-rating processes when calculating minimum required capital and reserve funds. Banks using the standardized approach may continue to use external credit ratings that include implicit government support assumptions until 30 June 2030, provided they demonstrate to the Authority that the applied risk weights are appropriate and sufficiently prudent. This Circular replaces Circular 5 of 2015 with effect from 30 June 2030.