Chaplin: Early engagement transforms Bank enforcement

David Chaplin, Executive Director of Regulatory Supervision at the Bank of England, described a clear and consistent shift in how subjects of investigations are engaging with the PRA and Bank.

Firms are now engaging earlier in the enforcement process, proactively identifying, acknowledging, and remediating breaches.

This sustained change is not isolated to a few cases but has the potential to become the new default for understanding and acting upon responsibility and candour in regulatory enforcement.

The PRA's remit covers approximately 1,300 banks, building societies, credit unions, insurers, and major investment firms, with broader Bank responsibilities for financial market infrastructures.

The PRA operates as a supervision-led regulator, using its enforcement resource in a targeted way to support supervisory aims, focusing on both looking back at what went wrong and influencing future behavior.

The traditional regulatory enforcement model often saw firms adopting a defensive posture, challenging conclusions and delaying admissions until late in the process.

While sometimes appropriate, this approach frequently led to slow, resource-intensive, and expensive investigations, increasing uncertainty and costs for all parties.

Such delays also postponed the dissemination of crucial enforcement lessons to the wider market.

Chaplin emphasized that efficiency and speed are vital, reducing prolonged uncertainty and optimizing regulatory resource deployment.

This shift aims to improve behaviors and meaningfully reduce regulatory burden without diminishing compliance incentives.