Prudential Regulation Authority (PRA)
The Prudential Regulation Authority is the part of the Bank of England that regulates and supervises the safety and soundness of UK banks, building societies, credit unions, insurers and major investment firms, about 1,300 firms in all.
Also called: PRA · UK Prudential Regulation Authority · Bank of England PRA
The PRA was created in 2013, when the Financial Services Authority was split in two after the 2008 crisis. Prudential supervision of deposit-takers, insurers and the largest investment firms went to the PRA at the Bank of England; conduct regulation of all financial firms went to the Financial Conduct Authority.
Its general objective is to promote the safety and soundness of the firms it regulates; for insurers it also aims to protect policyholders. It has two secondary objectives: facilitating effective competition, added in 2014, and facilitating the international competitiveness and medium-to-long-term growth of the UK economy, which came into force on 29 August 2023 under the Financial Services and Markets Act 2023. It sets capital, liquidity and governance standards through the PRA Rulebook.
Firms the PRA authorises are dual-regulated: the PRA for prudential matters and the FCA for conduct. Most payments and e-money firms are not in that group. A payment institution or electronic money institution is authorised and supervised by the FCA alone, which is why a UK payments business normally deals with the FCA, while a firm applying for a UK banking licence deals with both regulators. The PRA is the lead for authorising new banks and for their regulatory capital.
In practice
The number of PRA-regulated firms changes over time; the Bank of England gave about 1,292 in 2026. Check the PRA's and FCA's registers for a specific firm.
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Commonly confused with
| Term | How it differs |
|---|---|
| Financial Conduct Authority | The FCA regulates how all UK financial firms treat customers and markets, and is the sole regulator of most payments firms. The PRA regulates the financial soundness of banks, insurers and major investment firms. |
See also
- Financial Conduct AuthorityThe Financial Conduct Authority is the United Kingdom’s conduct regulator for financial services. It decides whether a payments or e-money firm may operate in the UK, authorizes or registers it, and supervises how it behaves afterwards.
- Bank CharterA bank charter is the authorisation that makes an institution a bank — granted in the United States either by a state banking department or by the federal Office of the Comptroller of the Currency. Deposit insurance and access to Federal Reserve services are separate approvals, not things the charter brings with it.
- Regulatory CapitalRegulatory capital is the minimum capital a licensed financial firm must hold, and keep holding, calculated by a method the regulator prescribes rather than by ordinary accounting. It is a continuing condition of the license, tested at application and at every examination afterwards.
- Basel Committee on Banking SupervisionThe Basel Committee on Banking Supervision (BCBS) is the global standard-setter for the prudential regulation of banks. Hosted by the BIS, it writes the Basel framework on capital, liquidity and leverage that national regulators then put into law.
- Electronic Money InstitutionA firm authorized in the United Kingdom or in an EU member state to issue electronic money and to provide payment services. The e-money it issues is a claim its holders have against the institution, redeemable at par and expressly not a deposit, which is why the funds behind it must be safeguarded.