The Bank of England’s regulatory arm has raised its budget by $31.6 million (£24.3 million) for the coming financial year saying that costs have increased due to its growing responsibilities and preparations for “emerging risks in the financial system”.
According to the latest business plan released on Wednesday April 20 by the Prudential Regulation Authority (PRA) its budget for the 2022/23 financial year is £320.9 million ($418 million), an 8.2% increase from last year.
The PRA Chief Executive Sam Woods outlined its plan for the year ahead saying it was:
“Committed to keeping pace with innovation and emerging risks, including the ongoing digitalization of financial services and the growth of crypto assets.”
The PRA states that the United Kingdom’s withdrawal from the European Union, along with “proactively preparing” for what it sees as risks to the country’s financial system is driving up operational costs. The regulator will also add 100 supervisory risk specialists to its headcount.
Detailing its business plan for the coming year, the PRA says it will be overseeing the risks that arise from firms’ having exposure to or increased levels of business with cryptocurrencies, adding:
“The PRA will also ask firms to report their cryptoasset exposures, treatments and future investment plans, and will engage with international partners, including at the Basel Committee on Banking Supervision, to establish a common, international framework for the treatment of cryptoasset exposures.”
The regulator said that it will continue its work on developing a regulatory framework for “innovations such as stablecoins.” Earlier this month, the UK Economic and Finance Ministry said it will amend regulations to add stablecoins as an accepted means of payment.
In March, Woods wrote a letter to the CEO’s of banks and other designated investment firms regarding their exposure to crypto assets to remind them of the regulators’ expectation to adhere to existing policies and regulations in light of their increasing interest in the space.
In the letter he referred to a raft of reports released that same month by UK financial regulators discussing the risks to the financial stability of the country posed by cryptocurrencies and decentralized finance (DeFi).