5.1 The PRA proposed to make rules specifying the levels of application for the new Large Exposures (CRR), Liquidity (CRR), Liquidity Coverage Ratio (CRR), Reporting (CRR), and Disclosure (CRR) Parts of the PRA Rulebook, where the PRA is making rules to replace parts of the CRR that HM Treasury is proposing to revoke in their entirety, relating to large exposures, liquidity, reporting, and disclosure [Parts 4, 6, 7A, and 8 of the CRR.]. The proposed rules sought to ensure that the requirements in those parts of the PRA Rulebook would continue to be applied at an individual, consolidated, and sub-consolidated level by replicating the levels of application provisions within the CRR.

5.2 Two respondents raised concerns about the level of application of the proposed NSFR rules. One respondent suggested that application of the standard to firms on a solo (ie individual) basis is not consistent with the Basel standard. Another highlighted that a potential unintended consequence arising from the application of the rules to solo institutions is the increasing complexity of consolidated groups' balance sheets due to intergroup funding arrangements.

5.3 The PRA has considered the responses and has decided not to change its approach. The PRA-s its proposed approach is consistent with the level of application of Basel standards [SCO10.3 and footnote 2 of the Basel III standards.]. The PRA considers that additional complexity resulting from the solo application of the NSFR requirements is proportionate to the benefits to firms' safety and soundness from the application of the NSFR.