International & EU

 

We have prepared a set of flowcharts to help firms navigate the new Handbook text. Implementation of the Capital Requirements Directive (CRD) has resulted in two new prudential sourcebooks that replace much of the existing Interim Prudential sourcebooks for banks, building societies and investment businesses.

The new sourcebooks are the:

  • General Prudential sourcebook (GENPRU);
    • and
  • Prudential sourcebook for Banks, Building Societies and Investment Firms (BIPRU).

The flowcharts focus on the simpler Pillar 1 methods for credit, market and operational risk in the relevant BIPRU chapters. There are also flowcharts explaining requirements for capital adequacy in GENPRU and group risk.

We have designed the flowcharts as a detailed, interactive index to GENPRU and BIPRU. They do not form part of the sourcebooks, nor do they constitute individual or general FSA guidance. Their purpose is to provide an interactive tool which can lead the user from the first page, where different types of BIPRU firms are listed (i.e. bank or building society, full scope BIPRU investment firm, etc.) to the applicable rules on capital requirements and capital resources in BIPRU and GENPRU for these types of firms.

The flowcharts:

  • explain through links, as far as possible on individual pages, how the different sets of rules relate to one other; and
  • provide references to the relevant Handbook rules.

There are two separate sets of flowcharts: one for solo rules and the other for groups. Each one has an initial set of instructions. They cover the following Pillar 1 sections of GENPRU and BIPRU:

  • Capital resources requirements (GENPRU 2)
  • Standardised approach to credit risk (BIPRU 3)
  • Credit risk mitigation (BIPRU 5)
  • Operational risk (BIPRU 6)
  • Market risk (BIPRU 7)
  • Group risk (BIPRU 8)
  • Securitisation (BIPRU 9)

An accompanying set of explanatory notes also help firms understand the requirements in GENPRU and BIPRU. Other sections of the CRD/Basel 2 implementation pages give practical advice on Pillar 2 and Pillar 3.