On 8 April 2025, the PRA (Prudential Regulation Authority) offered a modification by consent that would allow certain third country covered bonds under its rulebook to be included as Level 2A High Quality Liquid Assets (HQLA), subject to a cap on the amount recognised.
The PRA has received a number of technical comments and requests for clarification. As a result, the PRA has decided to pause the process and withdraw the modification, in order to consider and address the points raised appropriately. Once that process is complete, the PRA will clarify its approach.
In the interim, the PRA considers firms do not need to amend their approach to recognizing third country covered bonds under the Liquidity Coverage Ratio (CRR) and Liquidity (CRR) Parts of the PRA Rulebook.