The Prudential Regulation Authority (PRA) is a United Kingdom financial services regulatory body, formed as one of the successors to the

Financial Services Authority The Financial Services Authority (FSA) was a quasi-judicial body accountable for the financial regulation, regulation of the financial services industry in the United Kingdom between 2001 and 2013. It was founded as the Securities and Investmen ...

(FSA). The authority is responsible for the

prudential regulation Prudential regulation is a type of financial regulation that requires financial firms to control risks and hold adequate capital as defined by capital requirements, liquidity requirements, by the imposition of concentration risk (or large exposu ...

and supervision of banks, building societies, credit unions, insurers and major investment firms. It sets standards and supervises financial institutions at the level of the individual firm. Although it was initially structured as a

limited company In a limited company, the liability of members or subscribers of the company is limited to what they have invested or guaranteed to the company. Limited companies may be limited by Share (finance), shares or by guarantee. In a company limited by ...

wholly owned by the

Bank of England The Bank of England is the central bank of the United Kingdom and the model on which most modern central banks have been based. Established in 1694 to act as the English Government's banker, and still one of the bankers for the Government of ...

, the PRA's functions have now been taken over by the Bank and are exercised through the Prudential Regulation Committee. The company has since been

liquidated Liquidation is the process in accounting by which a company is brought to an end in Canada, United Kingdom, United States, Ireland, Australia, New Zealand, Italy, and many other countries. The assets and property of the company are redistr ...

. The PRA was created by the

Financial Services Act 2012 The Financial Services Act 2012 is an Act of the Parliament of the United Kingdom which implements a new regulatory framework for the financial system and financial services in the UK. It replaces the Financial Services Authority with two new re ...

and formally began operating alongside the new

Financial Conduct Authority The Financial Conduct Authority (FCA) is a financial regulation, financial regulatory body in the United Kingdom, but operates independently of the UK Government, and is financed by charging fees to members of the financial services industry. The ...

on 1 April 2013. As the Bank of England is operationally independent of the

Government of the United Kingdom ga, Rialtas a Shoilse gd, Riaghaltas a Mhòrachd , image = HM Government logo.svg , image_size = 220px , image2 = Royal Coat of Arms of the United Kingdom (HM Government).svg , image_size2 = 180px , caption = Royal coat of arms of t ...

, the PRA is a quasi-governmental regulator, rather than an arm of the government ''per se''. The PRA has its main offices at 20 Moorgate, near the Bank of England's central offices on

Threadneedle Street Threadneedle Street is a street in the City of London, England, between Bishopsgate at its northeast end and Bank junction in the southwest. It is one of nine streets that converge at Bank. It lies in the ward of Cornhill. History The stree ...

Role

The PRA's role is defined in terms of two statutory objectives: to promote the safety and soundness of the firms it regulates and, specifically for insurers, to contribute to the securing of an appropriate degree of protection for policyholders (section 12 of the PRA Statement of Policy). In promoting safety and soundness, the PRA focuses primarily on the harm that firms can cause to the stability of the UK financial system. A stable financial system is one in which firms continue to provide critical financial services – a precondition for a healthy and successful economy. It will have close working relationships with other parts of the Bank, including the

Financial Policy Committee The Financial Policy Committee (FPC) is an official committee of the Bank of England, modelled on the already well established Monetary Policy Committee (United Kingdom), Monetary Policy Committee. It was announced in 2010 as a new body responsible ...

and the Special Resolution Unit. The PRA's most significant supervisory decisions are taken by the Prudential Regulation Committee – comprising the

Governor of the Bank of England The governor of the Bank of England is the most senior position in the Bank of England. It is nominally a civil service post, but the appointment tends to be from within the bank, with the incumbent grooming their successor. The governor of the Ba ...

, the Deputy Governor for Financial Stability, the Deputy Governor for Monetary Policy, the Deputy Governor for Markets & Banking, the chief executive officer of the PRA (and Deputy Governor for Prudential Regulation) and independent non-executive members. The PRA's approach to regulation and supervision has three characteristics: * A judgement-based approach: The PRA will use judgement in determining whether financial firms are safe and sound, whether insurers provide appropriate protection for policyholders and whether firms continue to meet the threshold conditions. * A forward-looking approach: The PRA will assess firms not just against current risks, but also against those that could plausibly arise in the future. Where the PRA judges it necessary to intervene, it will generally aim to do so at an early stage. * A focused approach: The PRA will focus on those issues and those firms that pose the greatest risk to the stability of the UK financial system and policyholders. The PRA approach to supervision will not seek to operate a "zero-failure" regime. Rather, the PRA will seek to ensure that a financial firm which fails does so in a way that avoids significant disruption to the supply of critical financial services.

List of chief executives

The chief executive of the PRA is also the

Deputy Governor for Prudential Regulation. The following is a list of chief executives since the PRA's inception:

History

From 1 April 2013, the Prudential Regulatory Authority, alongside the

, replaced the

. In response to the onset of the

COVID-19 pandemic in the United Kingdom The COVID-19 pandemic in the United Kingdom is a part of the worldwide pandemic of coronavirus disease 2019 (COVID-19) caused by severe acute respiratory syndrome coronavirus 2 (SARS-CoV-2). In the United Kingdom, it has resulted in confir ...

in March 2020, the PRA sent a formal request to the seven largest British lenders to suspend dividends and share repurchases until the end of the year.

References

External links

* {{Authority control Bank of England HM Treasury Financial services companies established in 2013 Financial regulatory authorities of the United Kingdom 2013 establishments in the United Kingdom Government agencies established in 2013 Securities and exchange commissions Bank regulation