information on the risks posed by a firm ’ s group is critical to the pra ’ s approach to supervising international banks. our expectations are set out in two parts. firstly, a clear baseline of information we want on all international banks. this concerns : the nature of the firm and group ’ s business model ; the resilience of the firm and its parent from both an operational and financial perspective ; material risks to the firm ’ s strategy ; and resolution planning. then, on top of that, a proportionate and tailored set of data that reflects a firm ’ s business model, its scale and potential impact on uk financial stability. proportionality is key here. we need more detail on a firm ’ s group where it is larger, more systemic and where its business model is highly integrated globally e. g. trading and custody. this is because the more highly integrated uk operations are within the group, so the more readily losses or disruption can be transmitted to the uk operations. all speeches are available online at www. bankofengland. co. uk / news / speeches and @ boe _ pressoffice for highly - integrated businesses such as the trading activity of gsibs, we expect access to regular profitand - loss and risk data for key trading business lines. these are often fast moving so we need to monitor them on a daily or weekly basis so we can ascertain how businesses are performing and to identify product or risk management vulnerabilities. good practice examples of the data we typically receive where a strong and cooperative relationship exists with home state supervisors and firms, are set out in the statement. they include : a. daily or weekly profit and loss figures covering global and local business lines ; b. weekly or monthly group market risk reports ; c. the outputs from reviews e. g. the supervisory review and evaluation processes ; d. information on stress tests and how these affect the uk entity ; e. group liquidity information regularly in normal time and more frequently once there is a period of market stress ; f. any material change in the operational resilience of the firm or group, for example, cyberattacks that may affect the group systems and are used by the uk business or which threaten the survival of the firm or group ; and g. material findings from internal risk or audit functions, or external audit reviews ( particularly where there are common group wide systems and controls ). i would stress that, where we ask for group information, we are

these assets more accurately than capital markets. banks serve as a “ delegated monitor ” for investors. 4 this means the risks and uncertainties around the valuation of bank assets are fundamentally different than for non - financial firms. to willingly finance loans to banks, however, investors need to be capable of monitoring and pricing these risks ( known unknowns ) and uncertainties ( unknown unknowns ). 5 risks to banks ’ balance sheets include the credit, market and liquidity risks associated with different asset classes. pricing these risks is, in some respects, the less difficult task. standard asset pricing models, such as the capital asset pricing model ( capm ), put the pricing of risk at their core. pricing uncertainty is an entirely different kettle of fish. that uncertainty arises in part from the absence of a single, well - defined model for pricing some assets. when there is model uncertainty, the equilibrium price of an asset is no longer uniquely defined. instead equilibrium prices are defined by a range. 6 the wide range of prices at which similar - risk assets have recently been carried on the balance sheet of banks is testament to the scale of this model uncertainty ( chart 1 ). to price that uncertainty, investors would need information on the potential range of valuations, looking across sets of models and classes of assets. historically, that information has not been made available to investors. post - crisis, this may have contributed to investor aversion to bank instruments. pre - crisis, it may have contributed to a lack of timely action by banks themselves to restrict exposures to assets with significant valuation uncertainty. in the light of this, the bank of england has recently helped initiate a programme to enhance information on the valuation range of banks ’ fair - valued assets, working alongside the financial services authority ( fsa ) and the auditing profession. a framework for capturing such uncertainty was put forward in an fsa consultation paper on “ proposed regulatory prudent valuation return ”, published in december 2011. 7 this framework suggests that an upside and downside range for fair - valued assets be identified, categorised into distinct buckets. 8 this would give a guide to the potential variation in a bank ’ s solvency position arising from model uncertainty. it also asks banks to identify portfolios where valuation uncertainty is so severe that it is not possible to provide a plausible bound and to make disclosures around portfolios of particular interest to regulators. a varequivalent figure needs also to be disclosed for each asset class