Katharine Braddick has kicked off her revamp of the UK banking’s watchdog with a regulatory overhaul aiming to generate £2bn in savings for City firms.
The Prudential Regulation Authority chief, who took the reins in July, told a City audience on Thursday evening the watchdog would focus on four key priorities of resilience, growth, innovation and transparency over the next 10 years.
“Our task is to determine what the PRA must deliver in its second decade and how to create the regulator the UK will need for the future,” Braddick said.
The remarks came as Braddick – in tandem with the Financial Conduct Authority – unveiled an overhaul of the Senior Managers and Certification Regime (SM&CR) with a package estimated to save financial firms £2bn over 10 years.
Reforms included scrapping the Certification regime, which removes the requirement to annually assess, certify and publicly register around 139,000 non-senior management staff.
Pre-approvals for non-executive senior roles will also be replaced by a simple notification process to the FCA, while mandatory pre-approvals will be maintained strictly for core executive leaders.
“Achieving sustained and sustainable growth is the key economic policy question of this moment and regulation has its part to play, even if it is rarely the determinative factor,” Braddick said during her Mansion House address.
Former Chancellor Rachel Reeves appointed Bradick to the post after former boss Sam Woods’ term finished.
Braddick was viewed as the “outsider” candidate, joining the regulator after a four-year stint as head of strategic policy at Barclays. She is understood to have beaten Bank of England incumbent David Bailey to the position.
Banking watchdog to ramp up cyber focus as threats grow
Braddick said the PRA would develop its secondary growth objective to consider how the regulator’s work “influences the investment environment, the availability of capital for the firms we regulate and the pricing of the services they provide”.
“This framework will help ensure our regime remains relevant, effective, and proportionate,” she said.
Regulators will also raise the financial thresholds for consumer credit lenders and asset managers by nearly 50 per cent, meaning enhanced SM&CR requirements will fall on the largest institutions.
Braddick also announced the creation of a new unit sitting inside the PRA that will act as a “centre of excellence for operational and cyber resilience”.
Industry figures have sounded the alarm over the growing threat posed by new technology in the last year. Former HSBC UK chief Ian Stuart last year said the risk of cyber-attacks “keeps [him] awake at night” and the firm was being “attacked all the time”.
The Treasury Select Committee took aim at regulators this year for “not doing enough to manage the risks presented by AI”.
Braddick said: “The PRA is a world-class regulator. To continue to be so, we must become a world leading technologically enabled regulator.”
She added the cyber challenge was an area where the PRA “can and do partner effectively with industry and our international counterparts to progress our understanding of both risks and mitigants”.