PRA
PRAAlso called prudential Regulation Authority
The Prudential Regulation Authority is the UK's prudential regulator and part of the Bank of England. It supervises around 1,300 banks, building societies, credit unions, insurers and major investment firms, setting rules on capital, liquidity and governance so that firms are safe and sound and policyholders are protected.
How it works
The PRA authorises firms and supervises them in proportion to the risk they pose to UK financial stability. It writes the PRA Rulebook and supervisory statements, reviews capital and liquidity, runs stress tests with the Bank and approves senior managers. Most firms it regulates are dual-regulated, with the FCA supervising their conduct.
Its primary objectives are firms' safety and soundness and, for insurers, policyholder protection. Secondary objectives cover effective competition and, since the Financial Services and Markets Act 2023, the UK economy's international competitiveness and growth. PRA rules shape capital planning, model risk, operational resilience and outsourcing at every UK bank and insurer.
The rules
Created the PRA as a Bank of England subsidiary, replacing the FSA's prudential role; the PRA began work on 1 April 2013.
UK financial regulators and regulated firmsEnded the PRA's status as a subsidiary and brought it into the Bank of England, with a Prudential Regulation Committee.
The Bank of England and the PRAGave the PRA a secondary objective on UK international competitiveness and growth and moved retained EU financial law into the UK rulebook.
UK financial regulators and regulated firmsCommon questions
What is the difference between the PRA and the FCA?
The PRA supervises the safety and soundness of banks, insurers and major investment firms. The FCA regulates conduct across around 42,000 firms and prudential matters for firms the PRA does not cover. Larger firms answer to both.
Which firms does the PRA regulate?
Banks, building societies, credit unions, insurers and a small number of major investment firms. The Bank of England publishes lists of PRA-regulated firms, updated monthly for banks, building societies, credit unions and insurers.
Can the PRA fine firms?
Yes. The PRA has enforcement powers under the Financial Services and Markets Act 2000, including fines and public censure for firms, and action against approved individuals under the senior managers regime.
