Financial Crime World

UK Banking Regulations: A Guide to Governance and Supervision of Banks

The United Kingdom’s banking sector is subject to a complex web of regulations aimed at ensuring its stability, security, and integrity. In this guide, we provide an overview of the key legislation, regulatory bodies, and international standards that govern the governance and supervision of banks operating in the UK.

Key Legislation

  • The Banking Act 2009
  • The Financial Services Act 2012
  • Capital Requirements Regulation (CRR) and Directive (CRD IV)

These laws provide a framework for the regulation of banks, setting out requirements for their governance, risk management, and capital adequacy.

Regulatory Bodies

Prudential Regulation Authority (PRA)

  • Responsible for regulating the safety and soundness of banks

Financial Conduct Authority (FCA)

  • Focuses on the conduct and prudence of banks

Bank of England

  • Plays a key role in setting monetary policy and overseeing financial stability

International Standards

The Basel Committee on Banking Supervision, the Financial Stability Board, and the European Securities and Markets Authority all have a significant impact on the regulatory framework for banks operating in the UK.

Compliance Requirements

Banks must also comply with strict:

  • Liquidity rules
  • Foreign investment requirements
  • Liquidation regimes

These rules are designed to ensure that banks have sufficient capital and liquidity to meet their obligations and withstand periods of financial stress.

  • Greater focus on risk management
  • Improved disclosure requirements
  • Enhanced supervisory oversight
  • New regulations aimed at addressing specific risks, such as:
    • Climate change
    • Cybersecurity

By understanding these banking regulations and governance requirements, banks operating in the UK can ensure that they are compliant with all relevant laws and standards, and that their operations are stable, secure, and sustainable.