![]() ![]() ![]() Today I want to look past the caricature and explain how we really think about the relationship between capital requirements and the rest of the prudential regime, in the context of the government’s review of Solvency II. Like any caricature, this one starts with a single distinctive feature – it is the job of the regulator to uphold prudential standards particularly in good times when the long term benefit, indeed necessity of maintaining standards is easily overlooked – and then magnifies that one characteristic to the exclusion of all else. But I do have empathy, because regulators are also sometimes caricatured – in our case as single-mindedly risk averse, driven by an incentive to avoid firm failure, and paying insufficient attention to counter-balancing commercial incentives. I really don’t want to repeat some of the adjectives applied to her. In this earlier telling of the story, the visitor to the bears’ house is a caricature, and not a sympathetic one: (Let’s hope that the bears had good contents insurance.) ![]() After wreaking havoc in the bears’ house she jumps out of the window, and is never seen again. When preparing this speech I was surprised, and a little disturbed, to discover that in the first recorded version of the story, it is not a pretty young girl who enters the forest home of three bears, but a badly-behaved old woman, an outcast from her family. We are all familiar with the story of Goldilocks and the three bears. News and publications Open News and publications sub menu.Option-implied probability density functions Gross Domestic Product Real-Time Database The PRA’s statutory powers and enforcement Money Markets Committee and UK Money Markets Code Greening our Corporate Bond Purchase Scheme (CBPS) Operational resilience of the financial sector Financial market infrastructure supervision ![]()
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