The Prudential Regulatory Authority has made changes to the way banks hold capital above the mandatory minimum, creating a mandatory buffer which will be determined by a bank's score in the annual stress test for major lenders. The Bank of England will judge a bank's risk management and governance, and if it deems it to be weak, it may raise the buffer to cover the risk until the weakness is dealt with.
The Bank of England has made changes to the way banks hold capital above the mandatory minimum, creating a mandatory buffer which will be determined by a bank's score in the annual stress test for major lenders. The Prudential Regulatory Authority will judge a bank's risk management and governance, and if it deems it to be weak, it may raise the buffer to cover the risk until the weakness is dealt with.