Question to the HM Treasury:

To ask the Chancellor of the Exchequer, pursuant to the Answer of 28 January to Question 210062 on Loans: Mozambique, whether those prudential disclosure requirements were complied with in the case of the $2 billion of loans from UK-based banks to three state owned companies in Mozambique.

UK-based lenders are subject to extensive prudential disclosure requirements under UK law, including for loans made to Governments. The Capital Requirements Regulation requires firms to disclose the geographic distribution of their credit exposures, including those to central banks and governments. These are only required to be disclosed if the loans are material, in accordance with European Banking Authority guidelines. Similarly, the geographical distribution will be broken down to show the areas for which there are material exposures. Lending to a specific country may not be disclosed specifically as lending to that country’s government if it makes up a relatively small amount of the firm’s activity. Instead, the lending would be grouped together with other small exposures to foreign governments under ‘other’ categories.

It is firms’ responsibility to ensure adequate assurance over their disclosures and they are required to have policies for assessing the appropriateness of their disclosures, including their verification and frequency.

Firms’ compliance with disclosure guidelines will generally be subject to review from their Internal Audit function. As the relevant competent authority, the Prudential Regulation Authority (PRA) takes a risk-based approach to supervision, which will affect whether each individual firm’s disclosures are subject to a compliance review.