Who Regulates Banks in the UK? The FCA and PRA Explained

07 May 2024
Banks, which are the bedrock of a nation's economy, operate within a framework of strict regulations designed to maintain stability and security. In the United Kingdom, overseeing these financial institutions falls under the jurisdiction of regulatory bodies. So who regulates banks in the UK?
London Canary Wharf
Banks in the UK are regulated by the Bank of England's Prudential Regulation Authority (PRA) and the Financial Conduct Authority (FCA). The PRA focuses on the stability and resilience of banks, ensuring they have enough capital and manage risks. The FCA oversees conduct within financial services, aiming to protect consumers, ensure market integrity, and promote healthy competition among financial institutions.

But what else is there to understand? And how does this influence the landscape of Banking and Corporate Credit?

The Guardians of Oversight: Prudential Regulation Authority (PRA) and Financial Conduct Authority (FCA)

The PRA and FCA play a crucial role in banking and to an extent corporate credit.

The PRA is a subsidiary of the Bank of England, which regulates banks in the UK by assuming responsibility for fortifying the stability and resilience of financial firms. Its core focus lies in establishing guidelines on capital requirements for banks. The PRA mitigates risks by mandating adequate reserves to absorb potential losses, fostering a more secure banking sector.

In contrast, the FCA operates within financial markets, regulating conduct to safeguard consumers and uphold market integrity. This agency's role extends to overseeing how banks extend credit to corporate entities. It ensures fair treatment, and transparency in lending practices, and shields businesses from unfair or misleading financial products.

Impact on Banking and Corporate Credit: A Crucial Interplay

The aftermath of the 2008 financial crisis spurred the establishment of the PRA in 2013. Its mission was to fortify financial stability by implementing stringent measures. These measures encompassed capital adequacy, risk management, and stress testing, effectively bolstering the resilience of banks against potential crises.

The FCA's interventions have significantly enhanced transparency and accountability in the banking sector. By regulating financial conduct, it has addressed issues like the mis-selling of financial products. This ensures that corporate entities are shielded from unfair lending practices, fostering a more equitable lending environment.

What About Broader European Influence? The European Central Bank (ECB)

You might be wondering how this is affected post-Brexit.

Despite the UK's departure from the European Union, the ECB's policies hold relevance for banks operating internationally or within the EU. These policies influence banking regulations, impacting how banks function and comply with global standards.

How to Navigate Banking Regulations

The oversight of banks in the UK by the PRA and FCA is fundamental in ensuring financial stability, fair market practices, and consumer protection. Their regulatory efforts in Banking and Corporate Credit have reshaped the sector, making it more resilient and accountable.

Here's the deal:

Understanding who regulates banks in the UK, and the intricate web of regulations governing banking and corporate credit is imperative for industry professionals. Redcliffe Training offers immersive courses on Banking and Corporate Credit. They will equip you with comprehensive insights into regulatory frameworks, risk management, and lending practices, empowering you to navigate the complex banking landscape effectively.

To delve deeper into this subject and enhance your expertise in banking regulations, consider enrolling in one of our top-rated Banking and Corporate Credit courses.


What is the difference between FCA and FOS?

The Financial Conduct Authority (FCA) regulates financial firms, ensuring they meet standards and protect consumers. The Financial Ombudsman Service (FOS) resolves disputes between consumers and financial businesses when they can't reach an agreement. FCA sets rules, while FOS resolves complaints, providing an impartial resolution platform.

How do you check if a bank is regulated?

You can verify a bank's regulation by checking its website for regulatory information or using official databases like the Financial Conduct Authority (FCA) in the UK or the Federal Deposit Insurance Corporation (FDIC) in the US. Look for the bank's registration or licence numbers, or search the regulator's website for a list of regulated institutions.

Eager to learn more about banking regulation? Click below to find out more about Redcliffe Training's Banking & Corporate Credit courses:

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