We have prepared a set of explanatory notes to help firms understand the requirements that result from the Capital Requirements Directive (CRD). Implementation of the directive 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 explanatory notes focus on the simpler Pillar 1 methods for credit, market and operational risk in the relevant BIPRU chapters. There are also notes explaining requirements for capital adequacy in GENPRU, group risk and the integrated groups regime.

We have designed the notes to be read alongside GENPRU and BIPRU. They do not form part of the sourcebooks, nor do they constitute individual or general FSA guidance. Their purpose is to explain in high-level terms the key concepts and principles that lie behind the requirements. They also direct you to the particular sections where you can find the detailed rules and guidance.

An accompanying set of detailed charts also help firms navigate the requirements in GENPRU and BIPRU.

The explanatory notes cover the following Pillar 1 sections of GENPRU and BIPRU:

Other sections of the CRD/Basel 2 implementation pages give practical advice on Pillar 2 and Pillar 3.