UK Regulatory Radar

Insights and implications

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July 2024

Our new issue of UK Regulatory Radar brings you the latest industry and regulatory updates impacting financial service providers in the UK.

This edition is once again shorter than usual as whilst regulators are beginning to issue announcements following the UK general election, updates are still yet to return to usual levels and we are entering the traditionally quieter summer period. Revised publication dates for some regulatory announcements are unknown. However, others are beginning to filter through including the Listing Regime overhaul from the FCA.

Click on the images below for our latest insights and see the 'Further updates' section for other sector-specific developments.


Highlights this month

Counterparty credit risk management

Regulators’ concerns around the impact of the growth of private equity on banking

Private asset management

Evolving regulatory expectations

A new order?

What does the UK General Election result mean for FS regulation?

Consumer Duty Board Report

How to build a successful Consumer Duty annual assessment report


Further updates

Financial Stability Report: In the June Financial Policy Summary and Record, the Financial Policy Committee (FPC) found that the overall risk environment remains broadly unchanged from Q1, but that some asset prices have continued to rise, and the risk of a sharp correction persists. Geopolitical risks remain high and there is policy uncertainty associated with elections set to take place globally. This could make the global economic outlook less certain and lead to financial market volatility. However, the UK banking system remains strong enough to support households and businesses, even if the economy does worse than expected. The UK Countercyclical Buffer (CCyB) will be maintained at 2%. The next report will be in October.

Bank of England's quarterly statistical release: The Bank of England's (BoE's) June quarterly statistical release for banking sector regulatory capital showed that:

  • The CET1 capital ratio for the UK banking sector has decreased by 0.2 percentage points to 15.7%.
  • The level of CET1 capital increased by 0.6% on the quarter, from £462bn to £465bn.
  • The level of total risk-weighted assets decreased by 2.2% from £2,898bn to £2,963bn this quarter.

2024 BoE stress test: The BoE has released details of the two hypothetical scenarios for the 2024 desk-based exercise. The scenarios are countercyclical and linked to the FPC's assessment of the underlying level of risks and vulnerabilities in the UK and global economies and financial markets. Both are designed to be severe but plausible. The supply shock scenario sees a severe, negative global aggregate supply shock from an increase in geopolitical tensions and global commodity prices. The demand shock sees a severe negative global aggregate demand shock and global recession, resulting in falling inflation and a rapid drop in the Bank rate to 0.1%, remaining below 0.5% for two years. In both scenarios, there is a domestic and global recession, with UK GDP falling by 5%, unemployment rising to 8.5% and house prices falling by 28%, and world GDP falls by 3%. Aggregate findings will be published by the end of 2024. The BoE will not publish individual bank's results.

BCBS principles for sound management of third-party risk: In response to ongoing digitalisation and increased reliance on, and complexity of, outsourcing arrangements, the BCBS is proposing 12 principlesopens in a new tab for banks and prudential supervisors on the sound management of third-party risk. The proposals cover Third-Party Service Providers (TPSPs), Critical TPSPs and Intragroup TPSPs and provide guidance on effective third-party risk management, with the aim of enhancing banks' ability to withstand operational disruptions and mitigating the impact of severe disruptive events.

Useful information:

The KPMG Regulatory Barometer helps firms identify key areas of pressure across the evolving UK and EU regulatory landscape and measure the impact of the likely change.

The KPMG Financial Services Regulatory Insight Centre monitors and tracks the evolving regulatory landscape. If you would like to discuss any of the topics covered in more detail, please contact a member of the team below:

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