A document outlining the PRA’s approach suggested regulators will impose “direct restrictions on payments”, or require firms to improve their forecasting, systems or governance.
The PRA, which alongside the Financial Conduct Authority is set to replace the Financial Services Authority next year, will be responsible for the prudential regulation of deposit-takers, insurers and major investment firms, acting as part of the Bank of England.
The approach document reveals the wider plans regulators have for the industry from April next year.
The PRA will have a statutory objective to promote the safety and soundness of firms and its approach to supervision, it said, will be based largely on judgement.
It confirmed its intention to identify and tackle market risks before they materialise to harm consumers.
It said it will “focus on those issues and those firms that “pose the greatest risk to the stability of the UK financial system”.
