Which regulator is primarily responsible for macro-prudential regulation?

Which regulator is primarily responsible for macro-prudential regulation?

• A. FCA
• B. PRA
• C. FPC
• D. Bank of England

Answer: (C)

Macro-prudential regulation focuses on systemic risk and the resilience of the financial system as a whole, not just the safety of individual firms. The Financial Policy Committee, which sits within the Bank of England, is responsible for identifying threats to financial stability and for setting macro-prudential policy tools—such as the countercyclical capital buffer—to dampen credit booms and leverage across the system. The PRA handles microprudential regulation of individual institutions to ensure their safety and soundness, while the FCA oversees conduct and market integrity. So, the regulator primarily responsible for macro-prudential regulation is the Financial Policy Committee.

Macro-prudential regulation focuses on systemic risk and the resilience of the financial system as a whole, not just the safety of individual firms. The Financial Policy Committee, which sits within the Bank of England, is responsible for identifying threats to financial stability and for setting macro-prudential policy tools—such as the countercyclical capital buffer—to dampen credit booms and leverage across the system. The PRA handles microprudential regulation of individual institutions to ensure their safety and soundness, while the FCA oversees conduct and market integrity. So, the regulator primarily responsible for macro-prudential regulation is the Financial Policy Committee.