A. UK Regulatory Landscape Flashcards
What is the Prudential Regulation Authority responsible for?
Promoting safety and soundness of systemically important forms.
What is the Financial Policy Committee responsible for?
A committee within BoE responsible for horizon scanning for emerging risks to the financial system as a whole.
What is the objective of the Financial Conduct Authority?
Strategic objectives to ensure that the relevant markets function well. Operational objectives to protect consumers, protect financial markets and to promote competition.
Who is the Prudential Regulation Authority regulated by?
Prudential Regulation Committee
What are the two primary objectives of the PRA?
- Promote safety and soundness of the forms it regulates.
- Specific to insurance firms, to contribute to ensuring that policy holders are adequately protected.
What are the two tools PRA uses?
Regulation - sets standards or policies that it expects firms to meet.
Supervision - It assesses the risks that firms pose to the PRA’s objectives and take action to reduce them.
The PRA’s approach to regulation and supervision has three characteristics:
- Judgement-based approach, judgement whether financial firms are safe and sound.
- Outcomes-based approach, asses firms against current risk and future risk.
- Focused approach, Focused on issues and firms that pose greater risk.
What are the Macro-prudential tools used by the Financial Policy Committee?
Setting countercyclical capital buffers, ensuring banks increase capital in good times.
Variable risk weights, enforcing capital requirements on specific sectors.
Leverage Limits, limiting excessive build up on onandoff balance sheet leverage.
How many members does the FPC have?
13 Members
What considerations will the PRC take to advance the objectives of the PRA?
Competition, Growth, Competitiveness, Innovation, Trade and better outcome for consumers.
