Regulation 9 Buffer rates for exposures outside the UK

(1)

This regulation applies where the FPC recognises or sets a buffer rate for exposures—

(a)

held by a UK institution, and

(b)

located in a country or territory outside the United Kingdom (“overseas country or territory”).

(2)

The FPC may set a buffer rate for an overseas country or territory where the overseas regulator of that country or territory has not set and published a buffer rate for a capital buffer serving the same purpose as the countercyclical capital buffer rate set by the FPC under regulation 5.

(3)

The FPC may recognise the buffer rate set by an overseas regulator where that buffer rate—

(a)

exceeds 2.5%, and

(b)

serves the same purpose as the countercyclical capital buffer rate set by the FPC under regulation 5.

(4)

The FPC may set a buffer rate, determined in accordance with paragraph (5), for an overseas country or territory where—

(a)

the overseas regulator of that country or territory sets a buffer rate serving the same purpose as the countercyclical capital buffer rate set by the FPC under regulation 5 (“the overseas rate”), and

(b)

the FPC reasonably considers that the overseas rate is not appropriate to protect UK institutions from the risks of excessive credit growth in the country or territory to which the overseas rate applies.

(5)

The FPC may—

(a)

set a buffer rate for an overseas country or territory which is higher than the overseas rate for that country or territory, or

(b)

set a buffer rate for an overseas country or territory which is lower than the overseas rate for that country or territory provided that the rate set by the FPC exceeds 2.5%.

(6)

The FPC may only recognise or set a buffer rate under this regulation in order for the PRA to require UK institutions with exposures located outside the United Kingdom to apply that buffer rate in their calculation of their institution-specific countercyclical capital buffers.