We welcomed the overall objectives of the PRA to promote competition but raised reservations about whether the proposals will necessarily address its concerns effectively over the medium term, given the impending introduction of Basel 3.1, or meet the objective of fostering a more competitive UK mortgage market.

In our response, we commented on the proposal through the following lenses:

• Mortgage market characteristics - comparability with other jurisdictions.
• Timing of implementation - IRB approach evolution, Economic conditions and Future capital & MREL requirements.
• Capitalisation ?guardrails? and impact on risk sensitivity
• Supporting competition and impact on low-risk lenders and portfolios
• Other issues such as potential misinterpretation of Pillar 3 disclosures overly broad scope of the proposed floor

We concluded that flooring mortgage risk weights is not the appropriate way to achieve the PRA's objectives.