PRA’s Vicky Saporta: International standards maintain the trust of foreign regulators
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The executive director for prudential policy of the Bank of England has stressed the importance of following international standards as the UK is moving away from “unnecessary” EU rules.
At a speech given on Monday, Victoria Saporta said one way of achieving a trusted regulatory regime is by aligning with international standards “when they are appropriate for the UK”.
“Being seen a role model for good implementation of international standards helps us maintain the trust of investors, of firms, and of regulators in other countries. I think it’s worth stressing how advantageous that last point is for the UK,” she said.
“Regulators in other countries are the people who regulate foreign firms that want to do business in the UK, and who supervise the overseas operations of UK firms. I also believe that it is normally easier for internationally active firms to follow one global rulebook instead of having to meet the expense of adapting to a patchwork of local standards.”
Saporta, who also chairs the executive committee of the International Association of Insurance Supervisors, said the UK has been participating actively in global standard-setting bodies including the IAIS, which will be consulting later this year on an Insurance Capital Standard.
The ICS is a very ambitious global standard to provide a comparable, risk-based measure of the capital adequacy of internationally active insurance groups.
The final ICS has not been agreed. Version 2.0 of the ICS is currently under a five-year monitoring phase in some jurisdictions to assess how well it works.
Last week, Saporta’s colleague, Sam Woods, deputy governor for prudential regulation and chief executive of the Prudential Regulation Authority, said the PRA was planning two consultations in June and in September on the implementation of Solvency UK, the country’s reforms of Solvency II following Brexit.
Saporta acknowledged the PRA and the Treasury had had different views initially on the reforms but added both parties agreed the need to simplify the regime.
“Debates between us and the government have got a lot of public attention. But there are many areas where we fully agree about the benefits from simplifying the regime to better reflect the needs of the UK. And with the high-level policy decisions now clear, we are focussed on implementation and on delivering detailed proposals for consultation.”
She added: “All of this will be on top of what we are already doing to remove unnecessary rules we inherited from our time in the EU.”
Do you agree with Saporta’s views?
