PRA’s chief executive Sam Woods, said that it supports the government’s future regulatory framework proposals, which if approved would bring in a more “British style of rulemaking”. He added that this would entail “less fine detail in legislation and more ability for us to maintain and develop a coherent and dynamic rulebook”.
He continued that it was already developing a “simpler regime” for smaller banks, which it said would be beneficial for “safety and soundness and for competition”. Reports have suggested that this change, if it is passed, could allow smaller banks to offer cheaper loans, which could mean cheaper mortgages for some borrowers.
In a PRA report published earlier this week, it said that work on the “strong and simple regime” had commenced with plans to publish a consultation paper. It will set out the proposed scope and criteria for firms that would be eligible for the regime and additional information.
This follows a speech Woods made in 2020, where he said the PRA would re-examine the smallest set of UK deposit-takers, which covers smaller UK banks and building societies, to simplify the regulatory regime as it was no longer under EU regulation.
He said that in order to achieve this it would need to increase its resources with plans to employ a 100 more staff, which in turn would lead to a eight per cent increase in its levy to grow its budget.
Wood said: “It is going to be a very significant management challenge to staff up in this way in the current tight labour market and with increasing turnover following a period of fewer leavers during Covid.
“But as this plan outlines, this is a fascinating time to join the UK’s prudential regulator, and we hope to attract and retain colleagues with diverse backgrounds and experience.”
He said that the leadership team was “very much focused” on this task, but it could take over a year to achieve the increased staffing levels.
“In which case, we will need to tailor the work programme set out in this business plan accordingly,” he said.
The PRA currently regulates around 43 building societies and 320 banks as of January this year.
