On 5 July 2018, the FCA, PRA, and the Bank of England (together the regulators) jointly published a Discussion Paper, Building the UK financial sector’s operational resilience. The purpose of the Discussion Paper is to stimulate debate about the expectations the regulators and the wider public might have of the operational resilience of UK financial services institutions.
The Discussion Paper:
- explains why the regulators consider that managing operational resilience is most effectively addressed by focusing on business services, rather than on systems and processes;
- explains that financial stability rests on the operational resilience of individual firms, financial market infrastructures and the system as a whole;
- suggests that the boards and senior management of firms and financial market infrastructures could set their own tolerances for operational disruption, on the assumption that some (or all) supporting systems and processes will fail;
- expands the idea that firms and financial market infrastructures would develop impact tolerances for important business services; and
- explains how the regulators could gain assurance that firms and financial market infrastructures ensure continuity of their most important business services, and that boards and senior management are sufficiently engaged.
The deadline for comments on the Discussion Paper is 5 October 2018.