The UK Prudential Regulation Authority (PRA) has published its 2024/25 competitiveness and growth report, setting out how it has advanced its secondary competitiveness and growth objective (SCGO). The SCGO was introduced under the Financial Services and Markets Act 2023 (FSMA 2023) and requires the PRA to advance the international competitiveness and growth of the UK economy, particularly in financial services. The regulators are required to publish two annual reports, in 2024 and 2025, on SCGO implementation. The PRA also comments on its secondary competition objective (SCO), which requires the PRA to facilitate effective competition in the markets for services provided by PRA-authorised firms. Earlier this month, the House of Lords Financial Services Regulation Committee published a report on the regulators' progress in supporting growth and competitiveness, finding a prevailing culture of risk aversion by the regulators which undermines the objective.
The PRA's report references work it has done over the past year to advance the SCGO, including improving its regulatory processes to lower regulatory costs for firms, supporting industry innovation and contributing to the responsible openness of the UK. Many of the reforms designed to advance the SCO also promote the SCGO by contributing to a strong UK financial sector. The PRA has also taken actions to embed the SCGO within its organisation, including through training for staff and reviewing its supervisory decision-making frameworks, and to communicate its approach more effectively, including through speeches and published letters to the UK government. The report includes a list of SCGO metrics to help monitor the PRA's performance against the objective.
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