Prudential Regulation Authority Business Plan 2023/24

The Prudential Regulation Authority, PRA, has published its 2023/2024 Business Plan which sets out some key deliverables of the PRA for the upcoming business year based on the PRA’s key strategic objectives to
1. maintain or further improve – where needed – the resilience of banks and (re)insurance undertakings;
2. identify emerging trends and risks in the UK financial market, including macroeconomic risks and risks resulting from the conduct of market participants (e.g. regulatory arbitrage, cyber security threats, etc.);
3. support competition among financial market participants and enhance competitiveness of UK firms globally; and
4. become an „efficient regulator“ that operates in a timely, transparent, and accountable fashion.
Some of these deliverables are briefly noted below; to see all of them or more information on individual planned activities, please refer to the original Business Plan.
##### Key deliverables for 2023/2024
- Implementation of the Basel 3.1 standards to improve the calculation of assets (risk weighted assets (RWA)) for purposes of determining own funds requirements of banks and building societies based upon the Authority’s consultation (CP16/22) the feedback of which is currently being reviewed.
- Removal of the Common Equity Tier 1 (CET1) deduction requirement for non-performing exposures that aren’t „adequately accounted for“ as consulted on in currently running consultation (CP6/23).
- Issuance of a final policy statement as regards model risk management principles for banks based upon the Authority’s consultation (CP6/22) to ensure that model risks are adequately managed by supervised institutions.
- Issuance of a final policy statement to streamline the reporting requirements of Solvency II (re)insurance undertakings based on the Authority’s consultation (CP14/22).
- Further improvement of the current insurance stress test design, announcement of the new upcoming stress test dates and data, and the „development of the insurance stress testing regime needed to provide a robust test of resilience and to deliver results suitable for publication at individual firm level“.
- Issuance of a final policy statement on easing remuneration-related requirements of small CRR-regulated firms, e.g. by redefining what constitutes a „small firm“ and removing the „malus, clawback, and buyouts“ requirements as regards variable remuneration (based on consultation (CP5/23)).
- Further work on and a review of the feedback pertaining to a future financial services regulatory regime for cryptoassets based on consultation ISBN: 978-1-915596-55-0. To recall, the PRA seeks to impose requirements as regards the trading, dealing, or advising, custodizing, or the offering of cryptoassets.
- The effective supervision of financial institutions‘ risk management practices as regards climate change-related risks pursuant to the PRA’s supervisory statement (SS3/19).