Speech to be given by Katharine Braddick of the Bank of England at the Annual City Banquet, Mansion House, on Thursday 22 October 2026.

The PRA's second decade speech by Katharine Braddick.

Lady Mayor, thank you for inviting me to speak this evening. It is an honour to address you and your guests and a pleasure to be speaking alongside Nikhil, who I have known for many years and who I look forward to working with in this new role.

When I joined the PRA in July I joined an organisation that in a little over a decade had succeeded decisively in its initial core mission, a mission that is vital to the success of the United Kingdom and its economy: to restore the resilience of the financial sector, so that it can properly support businesses and households across the nation.

Thanks to the work of the PRA, and significant effort by industry, that resilience has not only been restored but significantly strengthened. This hard-won stability is a source of advantage for our financial sector and this country, and it underpins our position as a leading and trusted financial centre. It is also the principal legacy of my predecessor Sam Woods: we might all wish to say we had achieved such a thing in our careers.

In that decade or so the world has also, of course, changed. Security threats increase, exacerbated by a more fractured geopolitical landscape. Interconnected financial vulnerabilities are arising from stretched sectoral valuations, rising sovereign debt levels and increased market leverage. Technology presents extraordinary opportunities and material and novel risks. And society demands accountability and transparency from its public institutions to maintain their legitimacy.

A new long-term PRA strategy

In this context, then, our task is to determine what the PRA must deliver in its second decade and how to create the regulator the UK will need for the future. Next year I will publish for the first time a five-year strategy for the PRA. The strategy will set out how we intend to deliver four priorities I believe are central for the PRA's future success:

Resilience

The first priority is resilience. Maintaining the resilience of the UK's banking and insurance sectors is the foundation of our mission; the PRA identified early on that the need to address operational resilience as well as financial resilience is a prudential matter.

Addressing non-financial resilience is an ever wider and more complex task, not least as the frequency and materiality of cyber incidents grows. Firms need to continue to invest in their capabilities, not only to prevent incidents, but to ensure they can respond to and recover from severe disruption.

The PRA similarly needs to evolve. We will significantly increase our focus on firms' operational and cyber resilience. The cyber challenge, in particular, is an area where we can and do partner effectively with industry and our international counterparts to progress our understanding of both risks and mitigants. We will create a new PRA directorate, reporting directly to me, to act as a centre of excellence for operational and cyber resilience. We will also consult jointly with the FCA on this area of risk by the end of the year, continuing to clarify our expectations of firms as we develop our experience and understanding.

Growth

Our second theme is growth. Achieving sustained and sustainable growth is the key economic policy question of this moment and regulation has its part to play, even if it is rarely the determinative factor.

In the coming period we will further develop our framework for the secondary competitiveness and growth objective. It will address not only the costs and benefits of regulation, but how our work influences the investment environment, the availability of capital for the firms we regulate and the pricing of the services they provide. We will set out how that framework is embedded in our day-to-day decision-making, and how we will track the effect our work is having on the growth and international competitiveness of the UK.

This framework will help ensure our regime remains relevant, effective, and proportionate. We will engage industry and Parliament as we shape, use and learn from it. It will enable us to be clear and confident about our role, and articulate a well-founded understanding of our contribution to the economy. This is not just a means to deliver against the secondary objective but is ultimately a foundation for good regulation.

Of course, the PRA has already taken steps to keep our regime up to date, most recently working with our FCA colleagues to devise a new captive insurance regime to enable innovation and growth in the insurance market. And to remove barriers to growth and provide predictability, we consulted earlier this month on a framework to automatically index our regulatory thresholds with nominal growth, a first among major financial regulators.

As a next step, we have today set out with the FCA a second set of significant reforms to streamline the Senior Managers and Certification Regime. These proposals reduce the number of senior management functions requiring pre-approval and remove requirements relating to the certification regime, halving its regulatory burden on firms whilst retaining clear accountability of their senior leaders.

Innovation

Our third priority is innovation. The PRA is a world-class regulator. To continue to be so, we must become a world leading technologically enabled regulator. Working with industry, we will go further in refining the data we collect and how we collect it to ensure we can react to emerging issues and risks in a timely manner, while shrinking the need for ad hoc collections and removing collections whose benefits are not justified. We will take feedback from you on this as we go, refining our approach and prioritising the changes that add the most value.

We will accelerate our deployment of data analytics and new technologies, enabling supervisors to rapidly identify emerging themes and trends in risks. Working with industry, we will make it easier and more efficient to work with us by taking innovative approaches to data collection and enhancing the clarity and accessibility of our rulebook and supervisory guidance, streamlining communications so that firms can quickly and easily understand what we expect.

Transparency

And our fourth priority is transparency. A sound understanding of the intentions and priorities of the regulator is crucial for firms to be able to effectively plan and manage their risks. And a stable and predictable business environment is essential to enable investors to deploy capital in the UK economy. So we will provide a clear and transparent line of sight to firms, Parliament and society about our plans and priorities, not least through the publication of and reporting on the new strategy. That will provide the means for us to be held accountable for meeting our commitments and demonstrate that we are a listening and learning organisation.

As an early example of this approach, we will take decisive steps to improve the experience of banks and building societies in relation to internal models for residential mortgages. This has been a source of particular difficulty for many firms, and we need to learn the lessons of this experience.

The PRA has already improved the approval process for firms, and we will go further by providing additional transparency about our operational performance. We will consult in Spring next year on material policy changes to improve firms' access to a modelled approach. These proposals will be subject to challenge by an independent panel of industry and regulatory experts to ensure their feasibility, learning the lessons of the past to ensure our future policy is grounded in operational realities. Working with our colleagues in the wider Bank, we will also examine the interactions between hybrid mortgage models and stressed buffer requirements.

And we will conduct an independent review of the UK's implementation of hybrid ortgage model requirements to identify tangible ways to assist firms as they maintain and develop their models. The work of that review will be sequenced to ensure it does not jeopardise the delivery of ongoing model approval and policy work.

Delivering the strategy

The delivery of our strategy will rely on the considerable strengths that characterise the PRA: our deeply expert and purpose-driven people; our comprehensive knowledge of the firms we regulate; and our established approach to supervision judgement-led, forward-looking and focussed on key risks to safety and soundness. That work has underpinned the success of the PRA's first twelve years and must never be taken for granted.

As we take the PRA into its second decade, we will build on our strengths and track record by evolving our approach to meet the challenges of today and of tomorrow. We will ensure the financial sector remains resilient to the increasingly volatile environment we now face. We will set out clearly and confidently how we contribute to growth. We will exploit technology to retain our position as a world-leading regulator and supervisor. And we will operate transparently to underpin confidence in our work and thereby in our financial sector and economy.

The PRA in 2032 will be a forward-looking regulator that is respected and trusted. A regulator that is recognised for its work supporting a resilient, competitive and innovative financial system that in turn supports a thriving UK economy. I look forward to working with my PRA colleagues, and importantly also with you all, to deliver that vision.

Now, would you please join me in raising a toast to the Lady Mayor and the Mayoral Consort.