IEO makes recommendations on new PRA competitiveness and growth objective

The BoE’s Independent Evaluation Office (IEO) has published its evaluation of the PRA’s approach to its new secondary competitiveness and growth objective (SCGO).

The IEO is pleased that the PRA has invested in its approach to the SCGO through: hosting a conference to bring together and develop thinking on the topic; explaining the PRA’s views in speeches and a consultation paper; developing and delivering training to staff; and implementing a process to ensure the objective is considered during policymaking.

However, the IEO says that there are some areas that the PRA should be considering further. It has therefore set out nine detailed recommendations to the PRA to address these findings:

Clarifying the PRA’s vision and desired culture for supporting competitiveness and growth across all its activity

1. Further clarify the PRA’s vision for advancing competitiveness and growth, including how it will affect policymaking priorities.
2. Set out the culture and behaviour the PRA wants (and does not want) in its day-to-day activities, to support the SCGO.

Ensuring staff across the PRA have a consistent understanding of the new objective, and what they have to do to support it

3. Extend a version of training to supervisors and authorisation teams, making clear what they are (and are not) expected to do to advance the new objective.
4. Update training for policy teams and other key contributors to clarify ambiguities and facilitate consistent application of the SCGO.

Harnessing intelligence from inside and outside the Bank

5. A team should champion the SCGO, co-ordinating and building on existing networks so that intelligence from inside and outside the Bank informs policymaking.
6. Further refine external engagement mechanisms to facilitate effective feedback through the policy cycle and heighten transparency of decision-making.
7. Support further research and use reviews of rules to deepen understanding of how regulation influences competitiveness and growth.

Refining transparency and oversight mechanisms to build trust in the PRA’s approach

8. The PRA should periodically review its external reporting on how it has advanced the SCGO.
9. Strengthen governance reporting to ensure PRA leadership has sufficient oversight of how the SCGO is being embedded.

The PRA will report on progress in implementing the IEO’s recommendations through its annual reporting.