Bank Policy Institute

10/30/2024 | Press release | Distributed by Public on 10/30/2024 11:27

BPI Comments on Prudential Regulation Authority’s Supervision of Foreign Banks Operating in the U.K.

The Bank Policy Institute (BPI)[1] welcomes the opportunity to comment on the PRA's consultation paper on targeted updates to its approach to supervising international banks with activities in the UK, branch reporting, and clarifications to the expectations of firms' booking arrangements and extending their formal application to UK trading banks.

A major overarching concern for our members is the inherent tension between the PRA's expectations around booking models and those of the ECB. We welcome confirmation from the PRA that it works collaboratively with the ECB to reach mutually acceptable solutions where this tension arises. As we discuss further below, we would encourage the PRA to provide as much information as possible about a firm's options and potential solutions where divergent regulatory expectations have caused constraints in past case studies.

Banks also remain cautious about potential consequential impacts on these expectations as a result of other anticipated policy changes, for example in relation to revised expectations in the area of the senior manager and certification regime and revised deposit protection limits. We urge the PRA to consider the timing of all such developments and where possible engage with the industry early to enable both sides to appropriately consider the potential impacts and to collaborate on proportionate methods to redress any concerns.

We comment further on each of the three elements of the consultation below. We welcome further discussion on any of these issues, in particular if we might assist the PRA as it finalises its policy or to the extent that we have misconstrued any points of clarification by the PRA during our call on September 9.

With respect to those clarifications, certainty of expectations is critical to the attractiveness of the UK as an international financial centre and we respectfully request that concerns that have been raised by the industry are clarified in the final policy statement.

To read the full comment letter, please click here, or click on the download button below.

[1] The Bank Policy Institute is a nonpartisan public policy, research and advocacy group that represents universal banks, regional banks, and the major foreign banks doing business in the United States. The Institute produces academic research and analysis on regulatory and monetary policy topics, analyzes and comments on proposed regulations, and represents the financial services industry with respect to cybersecurity, fraud, and other information security issues.