Regulatory Alerts2024-04-17
D3-2024 - Minimum regulatory requirements relating to covered deposits
The Prudential Authority issued Directive D3-2024 to establish minimum regulatory requirements for banks, foreign branches, and controlling companies regarding covered deposits and fund liquidity contributions effective 1 April 2024. The directive mandates specific credit risk treatments, including a zero percent risk weight for standardised banks and probability of default or loss-given default substitutions for internal rating-based institutions, while defining precise liquidity coverage and net stable funding ratio factors for retail deposits and fund tier adjustments. Banks must report these exposures in designated form BA 200 line items and ensure external auditors acknowledge compliance, thereby aligning institutional capital calculations with the Corporation for Deposit Insurance’s resolution framework.