[2025] UKUT 00185 (TCC)

The Audit Committee met on the morning of 18 September 2018, the day after the CRPAC meeting. It was chaired by Mr Bernau, and three other members of the Board attended: Mr Carby, Mr Snyder and Mr Lockhart, while Mr Donaldson, Mr Arden, Ms Gillan and others attended as guests.

The minutes included the following passage:

“[Ms Gillan] gave the Committee a summary of the errors that were identified on the 2017 COREP (Common Reporting) returns. Inconsistencies in the reporting of commercial RWAs, specifically on commercial lending assets secured on property had been identified. Originally, the Capital Requirements Regulation had stipulated a risk weighting of 50% for these assets. The European Banking Authority Guidance had set discretion for individual national authorities to derogate from this position depending on their view of lending assets. The PRA applied a risk weight of 100%, it had not however published guidance or default data to confirm this and the required limits were therefore ambiguous. As a result the Bank was investigating revising the risk weights upwards from 50% to 100%. The error in reporting had been made based on ambiguous guidelines. There had been similar issues across the industry. The Bank had taken what it believed to be the correct approach at the time, but accepted that the error should be remediated and was working towards this.”