Banks and other financial businesses FAQs

Answers to frequently asked questions about banks and financial regulation in the UK

Your bank or building society

Financial regulation and the Bank of England

  • The 2008 financial crisis showed the UK (and the US and many EU countries) needed a new approach to financial regulation. 

    The UK Government abolished the Financial Services Authority in 2013 which, along with the Treasury and Bank of England, had been responsible for financial regulation since 2001.

    The Government divided responsibility for regulation between two new bodies – the Prudential Regulation Authority (PRA) and the Financial Conduct Authority (FCA). 

    The PRA is a part of the Bank of England. The PRA and the FCA both started their work on 1 April 2013.

  • We set rules for how banks should be run financially (we call this prudential regulation).

    We carry this work out through our Prudential Regulation Authority (PRA). The PRA’s policies ensure banks have enough capital (money or other wealth such as property or shares) and the right plans and structures in place. 

    We monitor banks to ensure they follow our policy. We do this by keeping in contact with bank staff at all levels so we can keep an eye on things like their accounts and the way they work. We call this work ‘supervision’.

    If a bank does get into difficulty, we work with it to ensure that firms have orderly wind-down plans in place. 

    Using prudential regulation and supervision, we try to make sure that banks are run properly, and that if a bank fails it doesn’t cause widespread problems in the economy.

    Find out more about our PRA’s approach to supervision.

  • The Prudential Regulation Authority (PRA) regulates and supervises around 1,500 banks, building societies, credit unions, insurers and major investment firms. It was set up by the Government in April 2013 as part of the Bank of England. 

    The PRA works to ensure financial services and products are provided in a safe and sound way. It also works to ensure that insurance providers protect, and can pay out to (where appropriate), anyone who buys their insurance policies.

    The Government set up the PRA in April 2013 as part of the Bank of England. 

    Find out more about the PRA.

  • The Financial Conduct Authority (FCA) is a UK regulator that oversees the conduct of over 58,000 financial firms. It also prudentially regulates 18,000 of these businesses.

    Its job is to protect the rights of consumers who use financial products, such as a bank saving account, mortgage or insurance policy. It is also responsible for improving the way the UK financial system works, and promoting competition amongst financial firms.

    The FCA is not part of the Bank of England - it is a separate public organisation. Find out more about it on the FCA’s website.

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This page was last updated 28 May 2020
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