Regulatory structure of the UK Financial Services Flashcards
Who is the FCA funded by?
What is the main role of the FCA?
Enforce rules and laws to mitigate conduct risk in the UK
What is Conduct Risk?
Risk of detriment caused to customers of financial services firms caused by poor conduct.
What does PRA stand for?
Prudential Regulation Authority
What does the PRA do?
It is the prudential regulator. It tries to stop prudential risk. Systemic risk. Watches over large firms. It is not
What is the FCA?
It is a company in its own right however it is owned by the government. The board is appointed by Her Majesties Treasury.
What is the PRA?
It is part of the Bank of England.
Do most companies have PRA issues or not?
No as most don’t cause any systemic risk as they are too small. The FCA are the only ones to regulate these firms.
Do the PRA regulate on small or large firms?
Only large firms are dual-regulated by the PRA and the FCA. Small firms ‘all other regulates firms’ are only regulated by the FCA.
What are the Bank of England’s main purposes?
Monetary Stability - stable prices and confidence in the system. (inflation levels)
Financial stability - stability of the financial system with the UK
What is the job of- the monetary policy committee?
Identify, monitor and take action to remove or reduce systemic risks within the UK financial system and wider economy. (builds resilience of UK financial system)
