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PRA to raise levy by £24 million to keep pace with financial innovation

PRA to raise levy by £24 million to keep pace with financial innovation

The Bank of England is to increase the levy charged to financial firms by £24 million in order to hire 100 new staff and keep pace with innovation and emerging risks.

The increase in the Prudential Regulatory Authority's 1,341-strong workforce comes as the body takes on new responsibilities for managing systemic risk following the UK's withdrawal from the European Union.

Above and beyond its expanded remit, Sam Woods a BofE deputy governor and head of the PRA says the regulator is "committed to keeping pace with innovation and emerging risks, including the ongoing digitalisation of financial services and the growth of crypto assets, the increasing use of artificial intelligence and machine learning, and developments in fintech. This includes our work to manage the risks to firms’ safety and soundness from climate change."

He says that the stretch on its resouces means that its responsibilities cannot be delivered without a slightly larger team.

The £24 million levy increase will raise the regulator's annual budget to £320.9m, a 9% rise.

However, Woods cautions that a labour squeeze and talent shortfall means that it may take up to a year to source the right staff.

"It is going to be a very significant management challenge to staff up in this way in the current tight labour market and with increasing turnover following a period of fewer leavers during Covid," he says.

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