What is the role of the Prudential Regulation Authority (PRA)?

The Prudential Regulation Authority (PRA) plays a crucial role in maintaining the stability and integrity of the financial system by promoting the safety and soundness of banks and insurers. This involves the oversight of the capital adequacy, risk management practices, and overall financial health of these institutions to ensure they have the necessary resilience to absorb shocks and continue to operate effectively. The PRA aims to protect the interests of depositors and policyholders, thereby contributing to the stability of the wider economy.

In contrast, managing consumer relationships in finance typically falls under the remit of other bodies, such as the Financial Conduct Authority (FCA), which focuses on consumer protection and competition. The PRA is not primarily responsible for overseeing compliance with financial laws; that is also generally within the scope of the FCA's responsibilities, which is more focused on the conduct of firms and protecting consumer interests. Handling consumer complaints regarding financial services is specifically a function of the FCA and the Financial Ombudsman Service, which address individual grievances rather than overseeing the prudential stability of financial institutions. Thus, the PRA's core function is clearly defined as promoting safety and soundness in the financial sector.