As part of a new ‘hands-on’ regulatory approach, British banks will be forced to hold buffers eight times bigger than those required before the financial crisis, according to the Financial Times.
Today banks, insurers, building societies, credit unions and investment firms met with Andrew Bailey, the head of the prudential business at the FSA and executive director at the Bank of England, to discuss the details of the Prudential Regulation Authority (PRA) documents published last week on how they intend to supervise firms in 2013.
Speaking at the event in London, Andrew Bailey said:
‘The financial crisis demonstrated the clear need for a new approach to financial regulation and that the new twin peaks model is the right one for the future. Both my job, and that of the PRA management team, will be to ensure the PRA protects the public’s access to critical financial services and that we contribute towards achieving and sustaining a healthy economy…
The PRA will expect firms to support and conform to the public policy objectives set by Parliament. This will not be a zero failure regime, but one where firms can fail in an orderly way without major detriment to the wider system. We will be here to ensure the safety and soundness of firms and the stability of the financial system. We want, and need, to ensure that the public can put their trust in a safe and sound financial system for the future.’
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