On 24 May 2021, the PRA published its business plan for 2021/22. The plan covers sets out the PRA’s strategic goals for the coming year, its budget for 2021/22 and its highest-level actions to mitigate the impact of COVID-19 on the regulated firms and the economy. 

In this month’s industry insight, we summarise the business plan’s strategic goals, which outline the PRA’s work priorities over the medium- to long term. These are: 

• Robust prudential standards and supervision – Have robust prudential standards, hold regulated firms and those who run them accountable for meeting these standards. Some of the work in the pipeline for this include: Publishing the final policy on the approach to the supervision of international banks operating in the UK; Publishing the UK implementation of the CRR II Regulation, and Engaging with stakeholders on creating a simpler prudential framework for smaller non-systemic banks and building societies and more. 
• Adapting to market changes and horizon scanning – Continue to adapt to changes in the markets where the PRA is involved and pre-empt and mitigate risks to its objectives. The areas identified relating to this goal include Climate change, FinTech and New risks such as those arising from the pandemic and geopolitical risks.
• Financial resilience – Ensure that firms are adequately capitalised and have sufficient liquidity for the risks they are running or planning to take. Some of the work in the pipeline for this include Conducting stress testing exercises and  Reviewing firms’ asset quality. 
• Operational resilience – Develop the PRA’s supervision of operational resilience to mitigate the risk of disruption to the provision of important business services. Some of the work relating to this goal include: Assessing whether firms can meet the policy expectations set out in its policy statement on operational resilience (PS6/21) by the time they come into force and Ensuring alignment with BCBS operational resilience guidance.
• Recovery and resolution – Ensure that banks and insurers have credible plans in place to enable them to recover from stressful events and that firms work to remove barriers to their resolvability to support the management of failure – proportionate to the firm’s size and systemic importance – in an orderly manner. Some of the work relating to this goal include: Supporting the implementation of the Resolvability Assessment Framework (RAF) and Developing an approach to recovery and resolution planning for insurers.  
• Competition – Facilitate effective competition by actively considering the proportionality of the PRA’s approach as it contributes to the safety and soundness of the UK financial system. Some of the work relating to this goal include Implementing a tailored approach to the supervision of new and fast-growing non-systemic banks and building societies; Supporting prospective new entrants, and authorising new entrants that comply with PRA requirements and Reviewing the leverage ratio. 
• EU withdrawal – Continue to deliver a sustainable and resilient UK financial regulatory framework following the transition period from the UK’s exit from the European Union. The PRA’s work for this goal includes reviewing the authorisation process for firms supervised under the temporary permissions regime (TPR). 
• Efficiency and effectiveness – Operate efficiently and effectively by ensuring that resources are allocated to work that best advance the PRA’s strategy, reduce the greatest risks to the delivery of its statutory objectives, and provide an inclusive working environment in which all staff can perform to their potential.  A priority for the PRA relating to this goal advancing the diversity and inclusion agenda where the PRA will be working jointly with the FCA and will push ahead with work on improving diversity in the financial sector, with plans for a discussion paper this summer.