The FSA and Bank of England today launched a detailed plan about the shape of the Prudential Regulation Authority (PRA).
Giles Williams, head of KPMG’s Regulatory Centre of Excellence in Europe, commented: “It is clear that the PRA will be more prepared to show its teeth and their supervisory approach will be far more hands on and onerous for financial institutions.
“In effect, the PRA will almost be second guessing financial institutions’ own management which raises challenges with regard to skill and proportionality. It is imperative they have the right people in place and are measured in their approach and level of intervention.
“It is fascinating to compare the PRA’s proposed approach to banking supervision with the interim report from the Independent Commission on Banking (ICB). There is an interesting juxtaposition between what both organisations are outlining around financial stability versus the protection of depositors. While the ICB interim report focused on protecting retail depositors, the major focus of the PRA looks to be ensuring greater stability of the UK financial system.
“The document released today focuses on banking supervision, when the mandate of the PRA extends far wider. The broader financial services industry awaits further details on the PRA framework.”
Notes to editor
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