The government is dismantling the FSA and giving the Bank of England control of macro-prudential regulation and oversight of micro-prudential regulation.
It will create a new Financial Policy Committee within the Bank of England.
The Bank of England will be the top regulator in the new system and will create two new regulators in 2013. The first, a PRA, will be charged with regulating banks and other financial institutions, and will operate under the Bank of England. The second regulator will be a new Consumer Protection and Markets Authority.
Roughly 25pc of the FSA’s 4,000 employees will be transferred to the PRA.
The Prudential Regulation Authority (PRA) was created as a part of the Bank of England by the Financial Services Act (2012) and is responsible for the prudential regulation and supervision of around 1,700 banks, building societies, credit unions, insurers and major investment firms. The PRA’s objectives are set out in the Financial Services and Markets Act 2000 (FSMA). The PRA has three statutory objectives:
- a general objective to promote the safety and soundness of the firms it regulates;
- an objective specific to insurance firms, to contribute to the securing of an appropriate degree of protection for those who are or may become insurance policyholders; and
- a secondary objective to facilitate effective competition.
Quick links to four of the PRA’s key initiatives: i) Strengthening accountability; ii) Solvency II; iii) CRD IV; and iv) Structural reform, are available below.
The PRA is part of the Bank of England and is responsible for the prudential regulation and supervision of around 1,700 banks, building societies, credit unions, insurers and major investment firms. The PRA has a particular focus on the solvency of specific financial markets such as: Insurance providers, Buy-to-let mortgage lenders, Credit unions and other specialist lenders.
