What is the Prudential Regulatory Authority
The Prudential Regulation Authority (PRA) obtained its powers and responsibilities on 1 April 2013 following the disbanding of the FSA through the Financial Services Act (2012). The PRA is part of the Bank of England and is responsible for prudential regulation of banks, building societies, credit unions, major investment firms and insurers. Along with work with other parts of the Bank of England, the PRA will work closely with the Financial Conduct Authority (FCA) to create a desired “twin peak” regulatory environment within the UK.
The PRA is responsible for ensuring that any failing financial firms can fail without affecting taxpayers and thus destabilising the financial markets. This regulator is responsible for over 1,700 financial firms. The PRA acts entirely independent of the government and is a wholly owned subsidiary of the Bank of England.
The main statutory objectives of the PRA are to:
- Promote and ensure the safety and soundness of the firms that it regulates, to avoid the potential harm which would be caused should the firms it regulates fail
- Aid in contributing the correct degree of protection for policyholders; this is more specific to insurers who must secure and appropriate degree of protection for those who become policy holders
PRA Supervisory Role
Provided by The Bank of England