Prudential Regulation Authority The Prudential Regulation Authority (PRA) is concerned about vulnerabilities in lenders’ IT systems and is proposing changes to capital rules on ‘funded reinsurance’. In parallel, the PRA is easing some restrictions, such as those on financial sector pay and lending limits, as the government seeks to reform regulation to boost growth. The regulator has found little sign of serious financial distress but is scrutinizing some lenders for due diligence concerns.

• The PRA’s outgoing chief, Sam Woods, expressed significant concern over the IT system vulnerabilities of lenders.
• Changes are planned for capital rules on ‘funded reinsurance’ due to concerns about sector arbitrage.
• The PRA is easing restrictions, including those on financial sector pay and lending/treasury activities post-2008 financial crisis.
• The government is pushing for regulatory reforms to stimulate growth, impacting the PRA’s policy considerations.
• Some lenders, including Barclays, are under scrutiny by the PRA for due diligence issues.
• Financial sector fines have fallen to their lowest point in a decade.
• The PRA is considering shortening the deferral period for certain regulations from 8 to 5 years.
• The Bank of England has delayed the start date for a revised framework to the beginning of 2026. Continue reading https://www.ft.com/stream/c3fcaa2b-cf31-4648-bb49-44070fea9478