Latest news with #PrudentialRegulationAuthority
Bloomberg
a day ago
- Business
- Bloomberg
Metro Bank Jumps as Reeves' Deregulation Push Delivers Win
Metro Bank Holdings Plc shares climbed after the company confirmed it will be a beneficiary of Chancellor Rachel Reeves' deregulation push across the City of London. The Prudential Regulation Authority announced last month that it would ease its so-called minimum requirements for own funds and eligible liquidity, or MREL, for small- and mid-sized lenders. Metro Bank said Wednesday the changes will mean it no longer has plans to raise future MREL debt.
Finextra
31-07-2025
- Business
- Finextra
PRA consults on ways to improve competition in the UK residential mortgage market
The Prudential Regulation Authority (PRA) has today unveiled a series of possible options to make it easier for mid-sized firms to scale-up and compete in the residential mortgage market, and is now opening a wide discussion with industry on how best to do so. 0 As announced earlier this month, the PRA has now published a discussion paper to explore different options that affect how firms can determine capital requirements for residential mortgage loans ('exposures') under the internal ratings based (IRB) approach. Any amendments that the PRA decides to take forward, informed by feedback to the discussion paper, would represent less complex regulatory requirements for many firms, and should speed up the approval process compared with the current framework. Currently, firms using the IRB approach model their capital requirements for their exposures to credit risk. This is in contrast to the 'standardised approach' which sets capital requirements for firms, and typically has higher average capital requirements for residential mortgages. Today's discussion paper looks at two IRB components: 'loss given default' (i.e. how much money a lender expects to lose if the borrower does default) and 'probability of default' (ie how likely it is that a borrower will fail to repay a loan). Firms must estimate both to obtain IRB permission. For loss given default the PRA is considering a 'foundation IRB approach'. This would allow firms to use PRA-prescribed values for loss given default instead of estimating their own. This would significantly reduce the amount of modelling, time and resourcing required to obtain IRB permission, making it easier for mid-sized firms to obtain it. Questions asked around loss given default include which firms it should be available to, whether the approach should differentiate between buy-to-let and owner-occupied mortgages, and whether the PRA should look beyond residential mortgages and towards other retail exposures for this approach. Firms would still need to model probability of default but the PRA is also considering amendments to address challenges faced by firms in estimating this. The PRA is keen to facilitate an open discussion on the costs and benefits of each option, and so is not committing to any specific options at this stage. It will decide which options, if any, to take forward to consultation in light of the feedback it receives on the discussion paper. David Bailey, Executive Director for Prudential Policy at the Prudential Regulation Authority, said: 'Mortgages are one of the most important financial products in the country and among the biggest decisions people make about their finances. The options set out in this discussion paper could have a positive impact on competition and growth whilst maintaining an appropriate level of resilience, and result in more people getting access to the finance they need to buy a new home.' 'Once we have feedback to this discussion paper, we will look to take forward the best options to support effective competition among UK lenders.' Today's paper builds on the Bank of England's recent announcements earlier this month of a package designed to promote banking resilience, competition and growth. The announcements include an implementation date of 1 January 2027 for most of Basel 3.1 and for Strong and Simple, the new capital regime for smaller firms that is designed to create a straightforward system that gives smaller firms the space to grow. The Bank of England also announced at the same time an increase to the indicative thresholds for the minimum requirement for own funds and eligible liabilities from £15-25 billion in total assets to £25-£40 billion, which is designed to provide greater clarity and flexibility for mid-sized firms.
The Independent
15-07-2025
- Business
- The Independent
Watchdogs insist reducing regulation will not increase risk of financial crisis
Financial watchdogs have insisted that the risk of a financial crisis will not increase as a result of measures announced by the Chancellor to cut regulation in a bid to deliver growth. Under questioning by the Commons Business and Trade Committee, a senior civil servant also confirmed the target to cut red tape by 25% will be measured in terms of costs to firms of current requirements, with a baseline set to be confirmed in 18 months. Rachel Reeves has unveiled a package of reforms to the UK's financial system aimed at boosting the economy and spurring on retail investing. The changes include reforming the bank ring-fencing regime and reducing burdensome regulation in the City in order to reintroduce 'informed risk-taking' into the financial system, the Government said. The Chancellor said the 'Leeds reforms', unveiled in the West Yorkshire city, 'represent the widest set of reforms to financial services for more than a decade'. Liam Byrne, Labour chairman of the Business and Trade Committee and a former chief secretary to the Treasury, said evidence suggests liberalisation of regulation is 'often accompanied by lending booms that end badly'. He asked senior officials tasked with implementing the changes whether the announcements made by the Chancellor would increase the risk of a financial turmoil. David Bailey, executive director at the Prudential Regulation Authority (PRA), said the organisation had 'built overall resilience in the system' since the financial crash in 2008. He added: 'The risk of a financial crisis, from the PRA's perspective in banking insurance, has not gone up because we have maintained the same level of reliance.' Sarah Pritchard, deputy chief executive at the Financial Conduct Authority, said there should be a public debate about 'where should the risk appetite be set' if, for example, greater access to mortgages leads to an increase in repossessions in the event of an economic downturn. When pressed on how measures announced today are different to previous 'liberalisation' implemented before previous financial crises, she added: 'There is nothing in today's set of announcements that causes me any different concern to that that David has set out.' When questioned on whether the measures will lead to a rise in asset prices if lending increases, Ms Pritchard added: 'There are a range of different factors at play. 'I think regulation is one aspect, but the general environment in which we all operate, in particular the UK being a global connected system, there is no one point that I would refer to in terms of that package today that is saying that will cause any different market risk or volatility.' Mr Byrne later pressed Chris Carr, director at the Department of Business and Trade, on how the target to reduce the administrative burden of regulation by 25% will be set. He confirmed the target is to reduce the burden to the planned level over the course of this Parliament and said the cost in pounds to businesses caused by red tape will be the measure. Mr Carr added: 'We have to agree and publish a baseline of the administrative burden and then strive to reduce it by 25%.' When asked how long it is expected to take for the baseline to be set, competition and markets minister Justin Madders said: 'We think it is going to take about 18 months, which is akin to the timescale it took under the last Labour government's similar exercise.'
Mint
15-07-2025
- Business
- Mint
Top Bankers Face Looser Conduct Rules Under UK Deregulation Push
UK regulators are planning to streamline a post-crisis regime that covers the conduct of senior bankers, part of the government's efforts to ease regulations and drive growth in financial services. The Financial Conduct Authority and the Prudential Regulation Authority said in a statement Tuesday that they aim to make the so-called Senior Managers Certification Regime 'less onerous' on firms while continuing to protect consumers and markets, and the safety and soundness of businesses. The regime was introduced in the aftermath of the 2008 financial crisis to ensure executives at financial-services firms can be held to account for misconduct that occurs on their watch. The move to simplify some of the rules is meant to ensure 'they work better for industry and support competitiveness,' FCA's chief executive Nikhil Rathi said in the statement. The tweaks are part of a blizzard of announcements by the watchdogs early Tuesday, with Chancellor of the Exchequer Rachel Reeves announcing measures to spur home ownership at an event in Leeds ahead of her Mansion House address — a heavily-choreographed setpiece that's keenly watched by the City of London bankers. Among the other announcements were an overhaul of the Financial Ombudsman Service that resolves customer complaints and a fresh review of the ring-fencing of lenders' retail and investment banking activities. Other measures in the Leeds review include: This article was generated from an automated news agency feed without modifications to text.
Reuters
15-07-2025
- Business
- Reuters
UK regulators propose simplifying senior manager certification rules
LONDON, July 15 (Reuters) - Britain's Financial Conduct Authority and Prudential Regulation Authority proposed changes on Tuesday to simplify the senior managers and certification regime in a bid to reduce red tape for financial firms. "We are proposing streamlining the rules, so they work better for industry and support competitiveness... while maintaining the high standards the regime has set," FCA Chief Executive Nikhil Rathi said. The proposals include giving firms more time to appoint senior managers in unexpected situations, cutting duplication in certification roles and extending the validity of criminal record checks. The consultation, part of broader efforts to support growth in financial services, runs until October 7.
