June 19 (Bloomberg) -- Britain’s banking regulator warned lenders they may face limits on how quickly they can expand their businesses if they fail to meet tighter rules on risk management.
The Prudential Regulation Authority, a unit of the Bank of England, said it could limit “balance sheet growth to a set percentage” each year at any firm that sparks concern over its “safety and soundness,” the watchdog said in a report published on its website today.
“The PRA wants to be satisfied in particular that designated risk management and control functions carry real weight within firms,” the London-based agency said in the report. It “expects firms to have a culture that supports their prudent management.”
The PRA, which took over banking supervision powers from the Financial Services Authority last year, has sought to boost risk management and corporate governance at lenders following the near-collapse of the Co-Operative Bank Plc. The lender’s parent was forced to cede control to the bank last year to help plug a 1.5 billion-pound ($2.6 billion) capital shortfall.
To contact the reporter on this story: Ben Moshinsky in Brussels at firstname.lastname@example.org
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