The Bank of England, the PRA and FCA have published a joint discussion paper on its approach to improve operational resilience in the financial sector.
The regulators envisage that boards and senior managers can achieve better standards of operational resilience through increased focus on setting, monitoring and testing specific impact tolerances for key business services.
The discussion paper sets out –
- why the supervisory authorities consider that managing operational resilience is most effectively addressed by focusing on business services, rather than on systems and processes;
- explains that financial stability rests on the operational resilience of individual firms, financial market infrastructures and the system as a whole;
- suggests that the boards and senior management of firms and financial market infrastructures would set their own tolerances for operational disruption, on the assumption that that some or all supporting systems and processes will fail;
- expands the idea that firms and financial market infrastructures would develop impact tolerances for important business services; and
- explains how supervisors could gain assurance that firms and financial market infrastructures ensure the continuity of their most important business services.
The discussion period ends on 5 October 2018.