The Treasury Sub-Committee on Financial Services Regulations has called for views on the Prudential Regulation Authority’s (PRA) ‘Strong and Simple Framework’ proposals.
The PRA’s Framework seeks to mitigate the ‘complexity problem’ that can arise when the same prudential requirements, including to control risks and hold adequate capital, are applied to all firms regardless of their size and business model.
The draft proposals aim to simplify the prudential framework for smaller – or ‘non-systemic’ – banks and building societies, while maintaining their resilience.
Ahead of an upcoming evidence session, the Sub-Committee requests written evidence on the proposals, the Framework’s scope, and the PRA’s consultation.
Stakeholders are invited to submit evidence on whether the proposals are appropriate to safeguard financial stability and the safety and soundness of individual firms, and whether the Framework sufficiently simplifies the rules for affected firms.
MPs will also explore the effect of the proposals on competition within the UK market.
Mel Stride MP, Chair of the Sub-Committee on Financial Services Regulations, said: “The PRA’s ‘Strong and Simple Framework’ proposals amount to a major change in prudential policy for banks and building societies.
“We are today calling for written evidence submissions that examine the impact of the proposals on the safety and soundness of smaller firms, and whether the reforms would successfully reduce the burden of regulation for these firms.
“We are also interested in views on the effect of the proposals on competition within the financial services industry and for consumers.”
The Sub-Committee on Financial Services Regulations is a sub-committee of the Treasury Committee. It takes the lead on scrutinising regulatory proposals for financial services.
