On October 1, BPI filed a comment letter with the Prudential Regulatory Authority, the Financial Conduct Authority and the Bank of England in response to their proposals (“Proposals”) to promote the operational resilience of banks and other financial institutions. The Proposals would establish a regulatory framework intended to promote the ability of banks to continue to operate in the face of operational disruptions through the use of impact tolerances for important business services and other measures. BPI expressed support for the focus on operational resiliency, which is an important priority of the private and public sectors to understand, assess and continually improve to protect the financial system. BPI made the following recommendations:
- Standards for operational resilience should ensure financial institutions have the necessary flexibility and agility to achieve operational resilience;
- Operational resilience standards should permit banks to leverage existing frameworks such as recovery and resolution planning, operational risk management, business continuity planning and cybersecurity resilience in designing their own approach to, and meeting supervisory expectations for, operational resilience;
- Operational resilience standards should focus on financial stability and safety and soundness;
- The Proposals should acknowledge the complementary importance of taking into account and prioritizing operational resilience efforts that prevent or limit disruption; and
- International coordination and consistency in standards for operational resilience are crucial in ensuring that global banks are subject to consistent and aligned regulatory or supervisory expectations in each jurisdiction in which they operate.