The way we prudentially supervise firms is based on policies that ensure judgements about risks to our objectives are made within a clear and coherent framework.
How we make prudential policy
We aim to establish and maintain published policy material that is consistent with our objectives, clear in intent, straightforward in presentation and as concise as possible. Taken as a whole, the set of published policy material is intended to set out clearly and concisely what outcomes we expect, so that firms can meet these expectations through their actions.
The policy framework for our supervision is to a large extent agreed internationally, both at a global level and previously within the EU. Now the UK has left the EU and the Transition Period has come to an end all relevant EU and EU-derived legislation, including binding technical standards that apply directly to UK firms, have been retained as UK law by the EU (Withdrawal) Act 2018 and amended as appropriate. Our PRA Rulebook has also been updated to reflect the UK’s withdrawal from the EU and the end of the Transition Period.
Where we issue rules, we aim to do so in a manner that is clear about the intended outcome, straightforward to understand and as concise as possible. We set out these rules in the PRA Rulebook Opens in a new window Opens in a new window, which contains direct requirements for firms. Our policy framework also includes non-rule material, which is contained in supervisory statements.
We expect firms to engage directly with policy materials, including rules in the PRA Rulebook, supervisory statements and EU materials, and determine - bearing in mind the overarching principle of safety and soundness - whether they are meeting the expectations set out in them.