New UK banking watchdog to review impact of rules on competitiveness

UK Banking Watchdog to Review Impact of Financial Rules on Competitiveness

Regulatory Review and Strategic Focus

By Kirstin Ridley and Phoebe Seers

LONDON, Oct 22 (Reuters) - Britain's banking watchdog will review how financial regulation affects investment, capital and economic growth, signalling a sharper focus on transparency and an objective to promote competition.

Around four months after becoming CEO of the Prudential Regulation Authority, Katharine Braddick said the PRA would publish its first five-year strategy next year, focusing in part on ensuring its regime remained relevant, effective and proportionate.

Competitiveness and Growth Framework

"We will set out how that (competitiveness and growth) framework is embedded in our day-to-day decision-making and how we will track the effect our work is having on the growth and international competitiveness of the UK," she told a dinner at London's Mansion House on Thursday, in her first major speech in the role.

Braddick said the PRA, part of the Bank of England, would work with industry to develop its competitiveness and growth agenda, including examining how regulation influences investment, the availability of capital and the pricing of financial services.

Resilience and Cybersecurity

RESILIENCE IS THE FIRST PRIORITY

But ensuring the resilience of the UK's banking and insurance sectors remains the PRA's first priority, Braddick said, particularly given the threat of cyberattacks.

Operational and Cyber Resilience Initiatives

She laid out a dedicated supervisory division to act as a "centre of excellence" for operational and cyber resilience, reporting directly to her.

"We will significantly increase our focus on firms' operational and cyber resilience," she said.

Reuters reported this month that banking regulators including the Bank of England were intensifying efforts to contain AI cyber risks.

Regulatory Streamlining and SMCR Consultation

The PRA and the Financial Conduct Authority on Thursday also laid out plans to further streamline a regime introduced after the 2007-09 financial crisis, in part by speeding up some senior bank job approvals.

Senior Managers & Certification Regime (SMCR) Changes

In the second phase of a consultation on the Senior Managers & Certification Regime, or SMCR, regulators said lightening the regulatory load on the industry would cut annual compliance costs by 53% to about £229.9 million ($307.91 million).

SMCR rules include how firms should deal with senior manager roles, identify and assess people's fitness for office and report conduct breaches.

The regulators have said the final rules should be published in the first half of next year, with implementation in the second half of 2027.

($1 = 0.7467 pounds)

(Reporting by Phoebe Seers and Kirstin Ridley; editing by Barbara Lewis)