3.1 Chapter 3 in DP1/21 outlined a long-term vision for a strong and simple prudential framework for non-systemic firms in the UK and explained how the PRA could realise this vision over time.

The long-term vision

3.2 DP1/21 noted that the diversity of PRA-regulated firms that are not considered systemically important suggested it was unlikely to be feasible to have a single set of strong and simple prudential rules applying to all non-systemic firms while still maintaining their resilience. The DP suggested it would be more appropriate to have requirements that expand and become more sophisticated as the size and/or complexity of firms increase - this was the PRA's long-term vision for a strong and simple framework. The DP asked the following question:

Q2: What do you think of the long-term vision for the strong and simple prudential framework for non-systemic banks and building societies in the UK?

3.3 The vast majority of respondents were supportive of the vision. Among the respondents that disagreed with the vision, some felt it did not put enough weight on enabling non-systemic firms to compete with larger, systemic firms, or that a strong and simple framework was not necessary because current prudential rules already include elements of proportionality.