HM Treasury has published responses from the Prudential Regulation Committee and Financial Policy Committee to its letters setting out recommendations.
- the Prudential Regulation Committee response notes what the PRA has been doing to support the recommendations, highlighting:
- in terms of its contribution to overall economic growth: its work on Strong and Simple, Basel 3.1, Ring-fencing, Solvency UK and operational resilience;
- on creating a regulatory environment that facilitates growth: a planned banking data review, its new approach to stress-testing, the SMCR review, the continuing transfer of assimilated law, engaging firms on innovation, implementing the Basel standard on prudential treatment of banks’ exposure to cryptoassets, reforming the matching adjustment, support for new entrants to the UK markets and continuing work on innovation in payments and settlement;
- on maintaining the UK’s position as a world-leading global finance hub: its work on international engagement and implementing international standards, as well as its engagement with Lloyds managing agents, work on remuneration reform, “responsible openness” and insurance reporting;
- on sustainable finance: continuing its work with the Climate Financial Risk Forum, so that the PRA and FCA will produce practical guides and tools for helping firms embed the financial risks from climate change into their organisations;
- on competitive capital markets: its work on reforming the ISPV regime; and
- on reinforcing financial inclusion and supporting home ownership: referring back to its work on Strong and Simple and Basel 3.1 as well as its support for start ups and its restatement of the CRR;
- the FPC response focuses on its work to consider prudential risks associated with both the banking and non-bank financial system, non-financial risks (such as conduct, cyber and climate change) and risks from the growth of private sector debt.