On 31 July 2019, the Bank of England (BoE) published a speech given by Miles Bake (PRA Head of Legal, Enforcement & Litigation Division). In his speech, Mr Bake outlined the PRA’s approach to enforcement providing an overview of recent PRA enforcement actions and explained the enforcement department’s agenda going forward.
In terms of recent enforcement activity, Mr Bake states that since April 2013, the PRA has:
- opened 22 separate cases. This has involved opening investigations into 17 firms and 32 individuals;
- of those, 12 cases have been (or are being) carried out jointly with the FCA;
- out of all those investigations opened into firms, seven investigations have concluded with a settled outcome, two closed with no enforcement action and eight are ongoing; and
- of those opened into individuals – all senior individuals – 19 are ongoing, seven have been closed with no PRA enforcement action, and six have resulted in a formal sanction.
Mr Bake also covers the Senior Managers Regime and enforcement against individuals. He starts with a very simple point that senior managers have always been and will continue to be within the PRA’s “appetite and interest”. He explains that this is why the PRA Business Plan refers to holding firms and the individuals who run them to account.
On this point, Mr Bake distinguishes between accountability and culpability. Here he describes accountability as a duty to give an account of matters for which an individual is responsible. Where, appropriate, a sanction may be the consequence where the individual has failed to meet expected standards. However, a lack of sanction does not mean a lack of accountability.
Mr Bake explains that the working agenda of the enforcement department is not distinct from the PRA’s agenda. He explains that enforcement is an aspect of the PRA’s supervisory approach, and focuses on investigations which buttress the PRA’s objectives and strategic goals. In terms of Mr Bake’s own immediate priorities, these tend to be operational and includes continuing to foster understanding of the enforcement department’s approach in the communities that matter most directly – firms and their legal advisers. Mr Bake states that the PRA’s enforcement actions are more impactful where they are better understood in context.
Mr Bake expressed that his own priorities for the future of the enforcement department are operational, namely to: i) safeguard the PRA’s independent operational capability to pursue whatever cases it needs to; ii) ensure that there is independence of settlement decision makers from the enforcement team while maintaining consistency in the interpretation of the PRA’s rules and policies; and iii) continue to foster understanding of the PRA’s approach to enforcement with firms and their legal advisors.