[2025] UKUT 00185 (TCC)

On 18 January 2019, during a meeting with Mr Arden, Ms Gillan and Mr Lane, Mr Donaldson said that the PRA had “discretion to make alternative judgements/solutions in private conversations”, see §253, Mr Arden’s oral evidence was that the PRA might have disapplied the 100% risk-weighting requirement for the CLIP mortgages so as to allow the Bank to revert to the 50% in the CRR. In closing, Mr Jaffey referred to a published list of waivers permitted by the PRA and the Authority (but without providing a related document) as support for the submission that until January 2019, the Bank did not know the PRA would not exercise that wide discretion in the Bank’s favour.

However, under cross-examination, Mr Arden had conceded that no-one in the Bank, no-one at the PRA and no external adviser, had ever suggested at the time of the Q3 Update that a waiver might be possible, and that this was first raised “later in the year”. We therefore find as a fact that the possibility that the PRA might have issued a waiver so the Bank did not have to follow its published policy on RWAs for CLIP loans was not considered before or at the time of the Q3 Update.

A reasonable issuer would not have decided in October 2018 that it could publish figures it knew to be wrong, on the basis that the PRA might have agreed to disapply its published requirements for the risk-weighting of CLIP loans, when that possibility too had never been raised with the PRA.