The broad contours of the package are now coming into focus – a lower risk margin, a strengthened matching adjustment with wider eligibility, and improved, more proportionate reporting and approval requirements. Third, we are putting a lot of effort into a review of Solvency II. Second, we are already developing a simpler regime for smaller banks, which will be good both for safety and soundness and for competition – we call this ‘Strong and Simple’ because we have no interest in a weak regime. This business plan sketches the wide range of activities that this will entail over the coming year, but let me pick out four.įirst, we very much support the government’s Future Regulatory Framework proposals, which – if Parliament approves them – will enable us to adopt a more British style of rule-making, with less fine detail in legislation and more ability for us to maintain and develop a coherent and dynamic rulebook. Without forgetting our past, we need to be thoroughly forward-facing in order to deliver our remit. Was it too backward-looking to refer to the financial crisis, given it is now well over a decade and several crises back? Have things moved on so far that the lessons of 2008 should slip down our priorities? We concluded the opposite – that for a prudential regulator, it is essential that we keep those lessons at the forefront of our minds, to make sure that the banking and insurance sectors can navigate the extraordinary challenges the world presents and avoid being a source of challenges for the rest of the economy. Whether to include this wording was debated amongst the leadership team and at the Prudential Regulation Committee. These include, importantly, the larger rule-making role that the government proposes we take on following Brexit, the greater attention we now pay to firms’ operational resilience including cyber resilience, and advances we need to make in our use of data and analytics.Īlong with all these changes we have quite deliberately chosen, in refreshing our strategic priorities, to include: ‘retain and build on the strength of the banking and insurance sectors delivered by the financial crisis reforms’. As a result of this we are making some changes to improve the efficiency and effectiveness of the PRA and to accommodate changes in the world around us. We took a little time during Covid to conduct a strategic review of the PRA, to see what lessons we could learn from the organisation’s first eight years or so of existence. This touches on a central aspect of this year’s business plan for the PRA. And there is also a deeper regulatory point, which is that at times like these – just as with the arrival of Covid and the economic shutdown that accompanied it – we are reminded why it’s vital to maintain high levels of resilience in the core of our financial system. ![]() There is an operational aspect to this, in that significant supervisory resource has had to be diverted at high speed away from planned work and onto dealing with the new crisis. In the context of the PRA, the war does also illustrate the need to expect the unexpected in our line of work. And then, through closely monitoring the first- and second-order effects of the conflict and the sanctions as they affect the system. And for a larger number of staff, we have also been directly engaged in the response to the invasion – first through working closely with the government and fellow regulators at home and abroad in advising on and implementing the sanctions. Although we are, thankfully, far from the armed conflict itself, it is a worrying time for those of our staff with friends or family caught up in it. These events of course have an importance far beyond the bits of them with which the PRA is involved. This year starts for us all with the terrible events unfolding in Ukraine, as a result of Russia’s invasion. News and publications Open News and publications sub menu.Option-implied probability density functions ![]() Gross Domestic Product Real-Time Database The PRA’s statutory powers and enforcement ![]() Money Markets Committee and UK Money Markets Code Greening our Corporate Bond Purchase Scheme (CBPS) Operational resilience of the financial sector Wholesale cash distribution in the futureįinancial market infrastructure supervision
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