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PRA could bring in rules without any consultation

The Government is considering setting up the Prudential Regulation Authority on the basis that it can implement rule changes without consulting the industry, according to warnings from regulation consultants Bovill.

The PRA will be responsible for the prudential regulation of banks and other deposit-takers, investment banks and insurers and will be a subsidiary of the Bank of England.

Bovill is concerned about a clause in the Treasury’s consultation paper on the new regulatory framework which says that the PRA may not have to consult before putting rules in place.

The paper states: “The Government is considering whether the rule-making unction should continue to be subject to statutory processes, including consultation with a practitioner panel, wider public consultation and the duty to carry out detailed cost-benefit analysis prior to the introduction of any new rules.”

Bovill chief executive Ben Blackett-Ord says: “It may not be statutory for the PRA to consult on rule changes, so if it wants to change a rule it will change a rule. I think there are some potentially scary issues there.”

Lansons public affairs and regulatory consulting director Richard Hobbs says the PRA will be consulting on highly technical issues so the clause is likely to be an attempt to make the consultation process less cumbersome.

He says: “I think that, for the PRA, some streamlining of consultation would be highly satisfactory but it should also be required to consult appropriately, with professional bodies, for example.”

Zurich UK intermediary sales director Richard Howells adds: “Experience tells us that better outcomes come about as a result of a good depth of consultation.”


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There are 5 comments at the moment, we would love to hear your opinion too.

  1. This is appalling. This country becomes more like the old communist block every day. All these organisations getting paid a fortune to make rules that affect us all without consultation. they sahould be shot, thats what happens in communist countries

  2. What differencvedoes consultation make, the last Government and FSA consult with various bodies at great cost and then ignore them anyway. At least this way we are saving money.

  3. Crazy gang IFA member 23rd September 2010 at 5:23 pm

    No change then. The Prudential Regulation Authority looks like becoming a pretty near succesor to the FSA. Have we once again really got to go through years of them not learning from previous mistakes, I hope not. It does not bode well though.

  4. The only change appears to be that, unlike the FSA, the PRA won’t bother wasting everybody’s time with the pretence of consultation.

  5. Well said Julian!

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