Record of the meeting between the Economic Secretary to the Treasury and the Chief Executive of the Prudential Regulation Authority (PRA).
1) On 17 July 2025, the Economic Secretary to the Treasury (EST), Emma Reynolds, met with the Chief Executive Officer (CEO) of the Prudential Regulation Authority (PRA), Sam Woods, to discuss the PRA’s performance against its statutory objectives and in relation to the government’s economic policy, as articulated in the letter of recommendation to the PRA.
2) This was the first performance review held with the PRA following the government’s commitment to formalise performance reviews as part of the Regulation Action Plan.
3) The EST thanked the CEO for the PRA’s support to deliver the Leeds Reforms. She asked the CEO to reflect, in particular, on the PRA’s work to embed its secondary international competitiveness and growth objective and on how the PRA balances this secondary objective against its other objectives. The CEO noted that the PRA is performing well against its primary objectives, helping to maintain stability of the UK financial system.
4) The CEO noted that the PRA has built momentum and delivered a number of policy and cultural changes directly as a result of the secondary international competitiveness and growth objective. He highlighted as particular achievements:
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progress made on implementing Basel 3.1, which includes important adjustments to support SME and infrastructure financing, as well as trade finance
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reforms to remuneration policy, which contribute significantly to the international competitiveness of the UK
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the removal of a third of reporting requirements for insurers, with more to come to reduce reporting requirements for banks
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the introduction of the Solvency II reforms (Solvency UK), particularly changes to the matching adjustment eligibility criteria and the PRA’s proposals for a Matching Adjustment Investment Accelerator
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proposed reforms to the Senior Managers & Certification Regime (SM&CR) to deliver a meaningful reduction in burdens on firms without increasing risks to financial stability
5) The EST asked the CEO about areas where the PRA could go further to promote informed risk taking and address excessive risk aversion in the system, as set out by the Chancellor through her letter of recommendation to the PRA and her Regulation Action Plan. The CEO noted that the PRA has further activity planned, including to review the ring-fencing regime jointly with the Treasury as announced by the Chancellor at Mansion House. He noted that the PRA fully supports the government’s ambition to raise the growth rate of the economy, and that everyone in the system has a role in setting risk appetite.
6) The EST and the CEO discussed how the PRA could contribute to the Financial Policy Committee’s review of its assessment of the level of capital needed to support UK financial stability and achieve the optimal balance to deliver resilience, and subject to that, medium-term growth and competitiveness.
7) The CEO welcomed the announcement that the government will introduce a requirement for the PRA to set out a long-term strategy for how it will advance its objectives, ensuring clear goals and priorities within its remit.
8) The EST and CEO discussed the PRA’s progress against the government’s target to reduce administrative costs for businesses by 25% by the end of the Parliament. The CEO noted that the PRA would make significant progress in reducing administrative burdens on PRA-regulated firms through reform of the Senior Managers Regime, including reducing authorisation timelines, and by reducing reporting requirements for firms.
9) The EST and the CEO discussed the new Scale-Up Unit that the PRA will launch with the Financial Conduct Authority, which was announced in the Leeds Reforms. The Scale-Up Unit will support firms to build their understanding of regulatory requirements as they scale, and look to address frictions in the process of firms applying for new regulatory approvals. This will complement the City of London and British Business Bank’s work to facilitate access to investment and networks of commercial opportunities that FinTech firms need to scale in the UK. They also noted the PRA’s commitments to enhance the approval processes for internal models for credit risk.
10) Finally, the EST and CEO discussed firms’ proposals to maximise opportunities under Solvency UK. The CEO emphasised the PRA’s openness to effective engagement with firms regarding applications for matching adjustment permissions.
