Designing stress tests for UK fast-growing firms and fintech

Pantos, S. (2023) Designing stress tests for UK fast-growing firms and fintech. Risks, 11 (2). 31. ISSN 2227-9091 doi: 10.3390/risks11020031

Abstract/Summary

This paper captures advances in prudential regulation and supervision for challenger banks and fintech in the UK. It presents a critical analysis of the prudential supervisory approaches towards fintech. The focus is placed on fast-growing firms (FGFs), building on the review performed by the Prudential Regulation Authority (PRA) of the Bank of England (BoE) in 2019. Specifically, it comprises a critical examination of the underlying regulatory framework in relation to the robustness of stress testing practices, as part of the review of FGF risk management practices and the weakness identified in the Internal Capital Adequacy Assessment Process (ICAAP). The economic analysis of law comprises the underlying methodology, using economic theory to analyse regulation and its effectiveness regarding fintech regulation and supervision. Recommendations for enhancements towards supervisory practices about the prudential governance and management of FGFs and fintech are included, with advances to the underlying regulatory framework in the UK. Overall, this critical legal research examines the supervisory practices of FGFs and fintech in the UK, under the lens of prudential regulation and risk management approaches, focusing on the design, development and implementation of the stress testing tool and scenario practices.

Item Type	Article
URI	https://reading-clone.eprints-hosting.org/id/eprint/110850
Identification Number/DOI	10.3390/risks11020031
Refereed	Yes
Divisions	Arts, Humanities and Social Science > School of Law
Publisher	MDPI
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