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Bank of England

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Bank of England

About Bank of England

The financial crisis demonstrated the need for a new approach to financial regulation and major changes to the Bank came into force in April 2013. The Financial Services Act 2012 established an independent Financial Policy Committee (FPC), a new prudential regulator as a subsidiary of the Bank, and created new responsibilities for the supervision of financial market infrastructure providers.

The Financial Policy Committee (FPC) is charged with taking action to remove or reduce systemic risks with a view to protecting and enhancing the resilience of the UK financial system. The Committee has a secondary objective to support the economic policy of the Government.

The Prudential Regulation Authority (PRA) is responsible for the supervision of banks, building societies and credit unions, insurers and major investment firms. In total the PRA regulates around 1,700 financial firms. The PRA’s role is defined in terms of two statutory objectives to promote the safety and soundness of these firms and – specifically for insurers – to contribute to the securing of an appropriate degree of protection for policyholders.

In promoting safety and soundness, the PRA focuses primarily on the harm that firms can cause to the stability of the UK financial system. A stable financial system is one in which firms continue to provide critical financial services to the economy – a precondition for a healthy and successful economy.