Overview of the PRA strategy
Retain and build on the strength of the banking and insurance sectors delivered by the financial crisis reform
The PRA will continue to support the Financial Policy Committee’s commitment to upholding levels of resilience within the banking sector, and for insurers; seek to avoid any material slippage through time in the level of protection afforded to policyholders through capital and provisioning levels. The oversight of firms aims to ensure strong governance structures and culture, so that risk-taking is conscious, controlled and supported by adequate financial resources, and information provided by firms is accurate and reliable.
Be at the forefront of identifying new and emerging risks, and developing international policy
The PRA’s horizon-scanning programme is at the heart of this priority. The PRA will seek out and tackle regulatory arbitrage, dangerous practices, and features of the regulatory regime that are not yet delivering the desired results. It will make clear, strategic choices about the areas in which it engages and leads.
Support competitive and dynamic markets
The PRA will appropriately balance its primary and secondary objectives, and, in particular, proportionality issues for small banks, such as variations in the use of risk-weights and internal models, in light of changes following EU withdrawal. There will be a renewed push on reducing barriers to growth as well as exit (working together with the Bank of England’s Resolution Directorate, thereby facilitating a more dynamic mid-tier banking sector, where new and growing firms can take on larger banks, and where struggling firms can fail without undermining the rest of the sector). The PRA will also develop its policies on competition (both domestically and internationally) to advance safety, soundness, competition, and competitiveness, and continue to make the UK an attractive place in which to do business.
Run an inclusive, efficient, and modern regulator within the central bank
In order to deliver the ambitious priorities set out above, the PRA needs staff with the right skills and experience, complemented by efficient technology and processes. The PRA will keep building a place where staff feel safe and empowered, striving to be an organisation where decisions are taken at the right level, and that is inclusive in every sense of the word. Change will take into account developments in regulatory technology, addressing inefficiencies, while leveraging the benefits of being a regulator within the UK’s central bank.