The Bank of England and the FSA have published a joint paper, The Bank of England, Prudential Regulation Authority – Our approach to banking supervision.It sets out the current thinking on how the future Prudential Regulation Authority (PRA) will approach the supervision of banks, building societies, credit unions and investment firms.

Hector Sants, FSA chief executive and PRA chief executive designate, said: “The PRA’s purpose is fundamentally different from that of previous regulatory regimes and will lead to a significantly different model of supervision to that which was in use pre-2007. In designing this new model we have incorporated both the lessons learned from the last financial crisis and those from firm failures of the past.