Page 3 - Pillar 3 Disclosure
P. 3















1. Introduction



At the beginning of 2007 a new legislative framework, the Capital Requirements Directive (CRD – also referred to as Basel 2) was introduced in 

the European Union (EU). This framework represents a part of the approach to ensuring capital adequacy for building societies and banks, 

governing the amount of capital required to be held by them in order to provide security for shareholders, members and depositors.




The CRD comprises three main elements or ‘Pillars’ as follows:

 Pillar 1: Minimum capital requirements;


 Pillar 2: Internal Capital Adequacy Assessment Process (ICAAP) and supervisory review and evaluation processes;

 Pillar 3: Disclosure.

This policy document deals with the requirements laid down for Pillar 3 (disclosure) and the information provided here is in accordance to the 


rules laid out in the PRA Handbook and in Chapter 11 of the Prudential Sourcebook for Banks, Building Societies and Investment Firms (BIPRU).



During 2013 the FSA divided to become the Prudential Regulatory Authority (PRA) and the Financial Conduct Authority (FCA). The PRA, a 

regulator of Ipswich Building Society (“The Society”), is responsible for monitoring capital adequacy. The PRA is responsible for ensuring that the 


banks, building societies and investment firms that it regulates have implemented the CRD.



In June 2013 the European Union published legislation to implement CRD IV (also referred to as Basel 3) which will replace the current capital 

directives. The new legislation is effective from 1 January 2014 with the aim to improve the banking sector’s ability to absorb shocks arising from 

financial or economic stress. The key CRD IV requirements are an increase in capital requirements and new capital buffers with higher thresholds 


including Capital Conversion, Countercyclical and Systemic Risk Buffers and the introduction of a minimum leverage ratio of 3%.



Under Pillar 1 the Society has followed the Standardised Approach permitted by CRD when calculating the minimum capital requirement. The 

Society’s Board approved the latest full ICAAP in November 2013. Capital requirements and adequacy are reviewed and updated monthly.




The figures quoted in this disclosure have been drawn from the Society's Annual Report and Accounts, and the analyses underlying those 

accounts, as at 30 November 2013 unless otherwise stated.

















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