On 19 September 2023, the Bank of England (BoE) published a speech by Victoria Saporta, Executive Director of Prudential Policy, which was delivered at the conference on the role of financial regulation in international competitiveness and economic growth held at the BoE.

In her speech, Ms Saporta highlights the following:

• In a Prudential Regulation Authority (PRA) context, the new secondary competitiveness and growth objective is about harnessing the UK’s strengths as a global financial centre by strengthening the following three foundations: maintaining trust in the PRA and the UK prudential framework; adopting effective regulatory processes and engagement; and adopting a responsive approach to UK risks and opportunities.
• Since February, the FCA has been continuing to work on strengthening the three foundations. This has included carrying out a pilot survey asking for views about the extent to which the PRA’s regulatory framework is advancing the new objective and how the PRA can further facilitate its implementation in the future.
• The survey showed that stakeholders care about the reputation of the prudential regulator to preside over a stable and predictable prudential regulatory framework that can withstand episodes of financial stress, and 93% of respondents agreed that the PRA’s regulatory framework fosters trust in regulated firms. Around the same proportion believed that the PRA provides a stable and predictable regulatory environment.
• In relation to adopting effective regulatory processes and engagement, 50% of respondents agreed that the PRA’s regulatory framework makes the UK an attractive place for overseas firms to set up operations, with speed of authorisations being flagged as an issue. In addition, 50% of respondents agreed that the PRA regulatory framework is accessible and user-friendly, suggesting there is scope to make rules less complex and thus less costly to comply with.
• With regards to the responsive approach to UK risks and opportunities, the survey results indicate that the PRA can do better in this area. Only 50% of respondents agreed that the PRA is responsive to new market developments and innovation, while a little over 60% believe that the PRA’s regulatory framework is responsive to UK-specific risks and opportunities.

Ms Saporta concludes by noting that she would be interested to hear views on whether the three foundations identified are the right ones, as well as views on the options for metrics to support accountability. She explains that these views will then feed into a consultation paper on the PRA’s approach to prudential policy, which the PRA plans to publish later in 2023, as well as into its overall approach to metrics.