Prudential regulation

The Bank of England prudentially regulates and supervises financial services firms through the Prudential Regulation Authority.

Prudential regulation rules require financial firms to hold sufficient capital and have adequate risk controls in place. Close supervision of firms ensures that we have a comprehensive overview of their activities so that we can step in if they are not being run in a safe and sound way or, in the case of insurers, if they are not protecting policyholders adequately.

The Prudential Regulation Authority (PRA) at the Bank of England is responsible for this prudential regulation and supervision of 1,500 banks, building societies, credit unions, insurers and major investment firms.

Find out more about what the PRA does


The strengthening accountability regimes for banking and insurance help to support a change in culture at all levels in firms through a clear identification and allocation of responsibilities to individuals responsible for running them.
Structural reform, also known as ring-fencing, will separate banks’ retail banking activities from their wholesale and investment banking activities.
We use stress testing to assess the health of the UK banking and insurance systems.
Solvency II sets out regulatory requirements for insurance firms and groups, covering financial resources, governance and accountability, risk assessment and management, supervision, reporting and public disclosure.
Capital Requirements Directive IV (CRD IV) is an EU legislative package covering prudential rules for banks, building societies and investment firms.
This page was last updated 13 December 2017
Was this page useful?
Add your details...