BoE asks financial firms for £24m more to enable crypto assets risk tracking

Bank of England

The Bank of England is asking lenders and insurers to pay an extra £24m so it can hire 100 extra staff and keep track of new risks, including those linked to crypto assets.

The central bank’s Prudential Regulation Authority (PRA), which is in charge of managing systemic risks across the financial sector, said it was expanding its 1,341-strong workforce in response to “new policy responsibilities” that also included setting the UK’s own rules after Brexit.

Sam Woods, a deputy governor and head of the PRA, said the Bank was trying to keep up with “innovation and emerging risks” including the boom in crypto assets, which an international watchdog has said could pose a serious threat to financial stability if regulators failed to take action.

The Bank’s governor, Andrew Bailey, also urged banks and other financial firms in December to be “especially cautious” when dealing with crypto assets such as bitcoin until new regulations are in force.

“In order to deliver an expanded role as a rulemaker and an increased focus on operational resilience, we will need to increase our resources this year with a budget that will allow us to employ around 100 more staff than last year’s budget,” said Woods.

He said the PRA also needed to monitor “ongoing digitalisation” of financial services, the use of artificial intelligence and machine learning, as well as other developments in fintech. “This includes our work to manage the risks to firms’ safety and soundness from climate change,” he added.

The PRA said its wider remit would require raising the annual levy for the 1,500 firms it supervises, as it planned to increase its annual budget by by about £24m to £320.9m, a 9% rise.

However, Woods said the regulator may struggle to attract candidates for its workforce expansion. Recent data showed a the UK unemployment rate fell to 3.9% in the three months to January, dropping below pre-pandemic levels for the first time.