BoE’s Nelson warns against ‘rigid’ approach to op risk
Firms may fear the “wrath” of regulators, but rules should not offer guarantees, says official
Some firms might prefer clearer rules on operational risk, but regulators should retain flexibility, the Bank of England’s Lyndon Nelson said on May 5.
The deputy chief of the Prudential Regulation Authority said “outcome or principles-based regulation” allows firms to choose the most “economic, efficient and effective way” to meet requirements. But some firms fear the lack of clarity could lead to them incurring the “unjustified wrath” of regulators, he added.
Nelson told the online event
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