On 19 June 2014, the Financial Conduct Authority (“FCA”) and the PRA published their responses to the recommendation of the Parliamentary Commission on Banking Standards (“PCBS”) that regulators be given additional powers to address failings of standards at senior levels of firms. The papers set out how the FCA and PRA may use their powers to address failings in standards, governance and culture, including how each regulator can meet the PCBS’s recommendations within their supervisory model, describes how regular supervision is used to address standards, sets out how the FCA’s new ‘Enhanced Supervision’ approach is employed when serious failings are identified, describes the PRA’s powers to appoint an independent to report on a firm’s activities giving rise to concerns, including in relation to failings in culture (the “skilled persons reports”) and describes how the FCA and the PRA work together. The PRA published a separate supervisory statement on reports by skilled persons on 19 June 2014.

The FCA’s paper is available at: http://www.fca.org.uk/static/article- type/news/tackling-serious-failings-in-firms.pdf and the PRA paper is available at: http://www.bankofengland.co.uk/pra/Documents/publications/policy/2014/powers culture.pdf. The PRA’s supervisory statement on reports of skilled persons is available at: http://www.bankofengland.co.uk/pra/Documents/publications/ss/2014/ss714.pdf.