Last week, David Bailey, Executive Director for UK Deposit Takers Supervision at the BoE, delivered his speech on the key next steps on the PRA's supervisory Operational Resilience roadmap.
David started his speech by saying that he was going to focus on one of The PRA's highest supervisory priorities at the moment, Operational Resilience.
He went on to say: "It is a particularly timely moment to be discussing the topic as it has been just over 12 months since our Op Res policy was published. Since then firms have been on a journey towards the end of March deadline that recently passed to identify their Important Business Services (IBS), set impact tolerances, and start mapping and testing to ensure they can remain within those impact tolerances."
David reiterated the following regarding Important Business Services (IBS) identification, highlighting that an IBS should:
At this time FourthLine would recommend continuing to set a single impact tolerance covering the PRA objectives however, the accompanying analysis and justification should specifically refer to each of the PRA's objectives to ensure completeness.
For impact tolerances, David noted quite a wide variance in the setting of impact tolerances, with more granular IBSs tending to have shorter timeframes;
"our teams will be pushing firms to justify their judgements"
Of note was the mention of how the PRA teams would have a specific focus on the justifications for these impact tolerances to better understand this variance and to help guide the industry to closer alignment.
FourthLine is working with a number of financial service firms to help them with Operational Resilience enablement, through a mixture of end-to-end consulting and resourcing options.
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