Prudential Regulatory Authority

Primary objective: promote safety & soundness of firms it regulates (banks/b.soc/credit unions/insurers/major invstmnt firms)

Secondary objective:

ensure PRA authorised persons carry on in way which avoids adverse effects on stability of UK financial system
minimise adverse effects that failure of PRA authorised person could be expected to have on stability of UK financial system

Objective to insurers: secure appropriate degree of protection for those who are, or may become policyholders

To secure an appropriate degree of protection for the reasonable expectation of policyholders as to the distribution of surplus under with-profits policies.

Threshold Conditions - include firms maintaining capital & liquidity and having suitable mgmnt.

PRA uses two key tools:

Regulation - standards or policies
Supervision - assess risks firms pose & takes action where req'd

Characteristics:

judgement-based: determine if firms are safe & sound
forward-looking: assess firms against future potential risk also & take early action where req'd
focused: focus on firms that pose greatest risk to stability of UK financial system & policyholders

Accountable to Parliament, the board consists of; governor of Bank of England, deputy governor for financial stability, chief exec of PRA, & independent non-exec members.

Global & European engagement

Actively involved in work of Financial Stability Board, Basel Committee on Banking Supervision, International Association of Insurance Supervisors, and the Joint Forum.

Key responsibility to supervise overseas firms operating in the UK & UK groups operating abroad. Will participate in 'supervisory colleges' for firms with significant operations in the UK.

Will engage actively with relevant European institutions & EU in on-going development & implementation of single market regulators. Bank of England will be voting member on ESRB.

ESA seek to improve co-ordination between national supervisory authorities in EU.

	Created by Mark Varela about 10 years ago

	Copied to Note by Mark Varela about 10 years ago

CII - Level 4 Diploma R01 - Financial services, regulation, and ethics (C5.1: Responsibilites & approach to regulation) Note on A: UK's Financial Services Regulatory Landscape - created from Mind Map, created by Mark Varela on 04/02/2014.

A: UK's Financial Services Regulatory Landscape - created from Mind Map