Featured Product

    PRA Publishes Business Plan for 2020-21

    April 09, 2020

    PRA published the Business Plan for 2020-21. This document presents the workplan for each strategic goal of PRA and details the highest-level actions taken to mitigate the impact of COVID-19 on the PRA-regulated firms. The strategy of PRA is to deliver a resilient financial sector by seeking an appropriate quantity and quality of capital and liquidity, effective risk management, robust business models, and sound governance, including clear accountability of firms’ management. Alongside the Business Plan, PRA also published a consultation paper (CP4/20) that explains how it proposes to fund its budget.

    PRA strategy outlines its intentions over the medium to long-term, with the following key strategic goals:

    • Robust prudential standards and supervision—Have in place robust prudential standards and hold regulated firms, and those who run them, accountable for meeting these standards. In 2020-21, PRA will focus on maintaining robust prudential standards and support the Financial Policy Committee’s (FPC) commitment to uphold the same level of resilience, to ensure continuity in the supply of vital financial services to the real economy throughout the cycle, including after severe shocks.
    • Adapt to market changes and horizon scanning—PRA will seek to maintain the dynamic resilience of the regulatory framework by scanning the horizon for emerging and evolving risks; evaluating the functioning of the framework for unintended consequences; and, where appropriate, intervening to make adjustments in response to these. Over the coming year, the areas that have been identified to be of particular interest include climate change risks, fintech, digital currencies, regtech, and application of artificial intelligence and machine learning.
    • Financial resilience—In the coming year, PRA will assess the adequacy of capital and liquidity resources of firms in the banking sector through a range of measures. PRA will continue to assess credit risk and asset quality and to consider the level and drivers of risk-weighted assets. Technical risk reviews, including internal models of firms, liquidity and capital assessments, and scrutiny of regulatory returns and other data, will remain core parts of the PRA work to ensure that firms are adequately capitalized and have sufficient liquidity. PRA also intends to consult on enhancing the internal capital adequacy assessment process (ICAAP) review process for mid-sized UK banks and building societies from 2020 and to continue engaging with relevant firms to take this forward. Additionally, in 2020, PRA will finalize and publish a supervisory statement on its expectations of firms’ implementation of the Prudent Person Principle (PPP) in Solvency II.
    • Operational resilience—Develop the supervision of operational resilience to mitigate the risk of disruption to the provision of important business services.
    • Recovery and resolution—Ensure that banks and insurers have credible plans in place to enable them to recover from stress events and that firms work to remove barriers to their resolvability to support the management of failure—proportionate to the firm’s size and systemic importance—in an orderly manner. PRA will continue to progress the work to end "too big to fail."
    • Brexit—Deliver a smooth transition to a sustainable and resilient UK financial regulatory framework following the exit of UK from EU. In the insurance sector, PRA will take forward work on the risk margin, regulatory data, and the appropriate calibration of the matching adjustment. Also, PRA will ensure a smooth transition to the risk-free rate calculation and will develop capabilities to independently produce all the various Solvency II risk-free rate components. In the banking sector, PRA will continue to monitor any risks presented by firms’ business models and governance as a result of restructuring their activities to accommodate the withdrawal of UK from  EU.
    • Efficiency and effectiveness—Strive to maintain the level of financial resilience of the banking and insurance sectors to be at least as high as it is today and work closely with these sectors to support their resilience while measures to prevent the spread of COVID-19 affect the business. PRA will endeavor to maintain a risk-aware, post-crisis culture in the firms, while embracing new technologies to improve its efficiency and effectiveness as a regulator and delivering greater benefits to financial services firms. PRA also plans to carryg out a discussion with firms to transform data collection from the UK financial sector over the next decade, seeking ways to decrease the burden on industry and to increase the timeliness and effectiveness of data in supporting supervisory judgments. BoE and PRA issued a discussion paper in January 2020, setting out a range of potential options drawing on ideas explored in the BoE response to the Future of Finance report (published in June 2019) and in the pilot on digital regulatory reporting. BoE and PRA plan to carry out direct stakeholder engagement during 2020, where possible in light of Covid-19, including bilateral meetings, round-table events, webinars, and industry working groups, some of which will be run jointly with FCA as the regulators continue to work closely together to ensure that reforms to data collection are aligned. 

     

    Related Links

    Keywords: Europe, UK, Banking, Insurance, Business Plan, COVID-19, Fintech, Regtech, Climate Change Risk, Recovery and Resolution, Brexit, Regulatory Capital, Operational Resilience, Solvency II, Reporting, PRA

    Featured Experts
    Related Articles
    News

    OSFI Outlines Prudential Policy Priorities for Coming Months

    OSFI has set out the near-term priorities for federally regulated financial institutions and federally regulated private pension plans for the coming months until March 31, 2022.

    May 06, 2021 WebPage Regulatory News
    News

    BIS Announces TechSprint on Innovative Green Finance Solutions

    Under the Italian G20 Presidency, BIS Innovation Hub and the Italian central bank BDI launched the second edition of the G20 TechSprint on the lookout for innovative solutions to resolve operational problems in green and sustainable finance.

    May 06, 2021 WebPage Regulatory News
    News

    EBA Proposed Regulatory Standards for Central Database on AML/CFT

    EBA proposed the regulatory technical standards on a central database on anti-money laundering and countering the financing of terrorism (AML/CFT) in EU.

    May 06, 2021 WebPage Regulatory News
    News

    ECB Responds to EC Consultation on Crisis Management Framework

    ECB published its response to the targeted EC consultation on the review of the bank crisis management and deposit insurance framework in EU.

    May 06, 2021 WebPage Regulatory News
    News

    ACPR Publishes Version 1.0.0 of RUBA Taxonomy

    ACPR published Version 1.0.0 of the RUBA taxonomy, which will come into force from the decree of January 31, 2022.

    May 06, 2021 WebPage Regulatory News
    News

    BCBS, CPMI, and IOSCO to Survey Market Participants on Margin Calls

    BCBS, CPMI, and IOSCO (the Committees) are inviting entities that participate in market infrastructures and securities markets through an intermediary as well as non-bank intermediaries to complete voluntary surveys on the use of margin calls.

    May 05, 2021 WebPage Regulatory News
    News

    ECB Amends Decision on TLTRO III

    ECB published Decision 2021/752 to amend Decision 2019/1311 on the third series of targeted longer-term refinancing operations or TLTRO III.

    May 05, 2021 WebPage Regulatory News
    News

    Central Bank of Ireland Issues Draft Template for AnaCredit Reporting

    The Central Bank of Ireland published Version 2.7 of the draft credit data template and rules for monthly AnaCredit reporting by banks.

    May 05, 2021 WebPage Regulatory News
    News

    OSFI Consults on Revisions to BCAR and Leverage Requirements Returns

    OSFI proposed revisions to the Basel Capital Adequacy Reporting (BCAR) and leverage requirements returns for the 2023 reporting, with the comment period ending on July 09, 2021.

    May 04, 2021 WebPage Regulatory News
    News

    EBA Seeks Views on Revisions to Nonperforming Loan Data Templates

    EBA published a discussion paper on review of the standardized nonperforming loans (NPL) transaction data templates, along with the proposed revised NPL data templates.

    May 04, 2021 WebPage Regulatory News
    RESULTS 1 - 10 OF 6936