In December 2023 the Bank’s Court of Directors commissioned its Independent Evaluation Office to conduct an evaluation of the Prudential Regulation Authority’s approach to its new objective.
Summary
In August 2023 the Prudential Regulation Authority (PRA) was given a new secondary objective – the secondary competitiveness and growth objective (SCGO) – as part of the reform of how financial services regulation operates in the UK. It requires the PRA to facilitate the international competitiveness of the UK economy and its medium to long-term growth (subject to aligning with international standards).
We have seen considerable focus on the SCGO inside and outside the Bank ahead of and since its introduction. Reflecting this, in December 2023 Court commissioned the Independent Evaluation Office (IEO) to evaluate whether the PRA is ‘set up for success’ with respect to the SCGO.
Findings
The IEO found numerous positives in the PRA’s approach to its new objective. The PRA has reflected the SCGO in staff training, internal processes and public communications. Competitiveness and growth issues appear to be receiving airtime and gaining traction at all levels of the organisation.
Recommendations
The IEO’s recommendations fall under four themes. The first sets out the importance of the PRA having a clear vision for advancing competitiveness and growth, and building a culture to support this. The second is to ensure PRA staff have a consistent understanding of the new objective, and what they have to do to support it. The third theme focuses on the importance of harnessing intelligence from inside and outside the Bank to inform policymaking and deepen understanding. The final theme recognises that effective transparency and oversight mechanisms are necessary to build trust in the PRA’s approach.
IEO evaluation of the PRA's approach to the secondary competitiveness and growth objective
