The regulatory arm of the Bank of England, the Prudential Regulatory Authority, has decided to increase its budget for the coming financial year by a whopping $31.4 million, which is about 2.43 million GBP. The PRA cited an increase in responsibilities that had resulted in an increase in costs, as the authority has to prepare for the risks that are emerging in the financial system. On Wednesday, the PRA’s latest business plan was released, which showed that its budget for the financial year 2022/2023 is around $418 million, which is close to 320.9 million pounds.
As compared to the previous year, this makes it an increase of 8.2%. Sam Woods, the chief executive of the PRA, also outlined the plan of the authority for the upcoming year. He said that the authority was committed to staying up to date with emerging trends and innovation, which also include the growth of the crypto space and the digitization of the financial industry. The PRA said that their operational costs had increased after the United Kingdom had withdrawn from the European Union and they are also preparing for what they consider are risks to the financial system of the country.
Furthermore, the regulator is also planning to expand its headcount by 100, as they will hire supervisory risk specialists. The PRA provided some details about its business plan for the financial year. It said that it would oversee the risks that would increase because of the exposure of companies to cryptocurrencies, or their increased business in the space. It added that companies would be required to disclose their exposure to crypto-assets, along with their future investment plans and the treatment of these assets. Likewise, the PRA would also reach out to international partners, which include the Basel Committee on Banking Supervision.
The purpose is to develop a standard international framework that can be used for the treatment of crypto assets. The regulator also added that a regulatory framework would also be developed for dealing with innovations, such as that of stablecoins. The Economic and Finance Ministry of the UK had stated earlier this month that they were going to amend regulations for adding stablecoins as a method of payment. Woods had written a letter back in March to chief executives of investment firms and banks about their crypto-asset exposure and reminded them about adhering to the regulations and policies in accordance with their increasing interest.