by the covid pandemic in 2020. this statement sets out our expectations on the second and third of these pillars. supervisory cooperation to support responsible openness to international wholesale banking, be it as branches or subsidiaries, and to meet our objectives on safety and soundness and financial stability, we need confidence that : a. the home state supervisory regime delivers outcomes which are sufficiently equivalent to the uk regime ; b. there is effective supervisory cooperation ; and c. there is assurance over the home state resolution framework. https : / / www. bankofengland. co. uk / speech / 2020 / sam - woods - city - banquet https : / / www. bankofengland. co. uk / financial - stability - report / 2020 / december - 2020 all speeches are available online at www. bankofengland. co. uk / news / speeches and @ boe _ pressoffice the first and last points concern in large part the legislative framework, rules and powers of intervention that home states and authorities have. the better the outcomes they deliver, so the more reliance we can place on risks arising from overseas operations being manageable. the second point is about how those powers are applied, the practices, and openness of overseas authorities that wield them. it is on this point that i want to focus as a supervisor. cooperation with home state supervisors for both branches and subsidiaries, the pra places reliance on cooperating closely with the home state supervisor, for branches this is particularly the case for prudential requirements, because a branch is not a separate legal entity. but for both there needs to be effective regulatory and supervisory cooperation if openness is to be ‘ responsible ’. we have a long history of working very effectively with a range of supervisory authorities, including the us, eu, switzerland, japan, and many others. the recent market stability issues resulting from the covid health crisis has provided an opportunity to ensure there is a good flow of information between authorities and coordinate our approaches where appropriate. as a recent example, in december, the pra, european central bank ( ecb ) and federal reserve board all published short statements on our respective websites5 highlighting that, recognising the global and interconnected nature of banks, we are committed to working closely to ensure that supervisory approaches on operational resilience are well coordinated. given the uk ’ s exit from the eu, i would like to specifically mention the open and supportive relationship we have with colleagues at the

responsible openness : the pra ’ s approach to supervising banks speech given by david bailey, executive director for international banks supervision, prudential regulation authority bank of england hosted webinar 11 january 2021 i am grateful to andy murfin, tom crossland, orfhlaith sheehy, caleb barnes, shakir anverally, marina barnard, ross howie and tanveer hussain for their assistance in writing this speech. all speeches are available online at www. bankofengland. co. uk / news / speeches and @ boe _ pressoffice introduction welcome. i am delighted that so many of you could join us today. i started my role as executive director for international banks supervision in late 2019. i took on the role, in part, because of the wide variety of firms i would be supervising, the diversity of cultures i would be interacting with, and the promise of travel to exotic locations. the role has delivered in many respects – although given the events of the last year, the travel has been somewhat disappointing. while my travel guides are left unread, my videoconferencing systems guide has many worn pages. one clear lesson i have taken away from talking to such a variety of institutions remotely, is the value of simple and clear communications. so today i will be giving you the headlines from our supervisory statement published today that sets out the pra ’ s approach to supervising international banks. it sets out publicly, for the first time, our approach to subsidiaries and combines that with the approach set out in our existing supervisory statement on branches ( ss1 / 18 ) 1. let me emphasise that the key message i want to give you today is one of stability and consistency in our overall approach. we have all faced a lot of change and uncertainty, especially over the last year – but i want to assure you that our supervisory approach remains both stable over time and consistent across the firms we supervise. it remains both robust and proportionate. why now? we are publishing this now, for three main reasons : 1. first, to set out our approach to host supervision in a holistic way. we published our approach to branches in 2018 but this publication goes further and covers the full range of authorisation options available to international banks. by making clear our expectations we will provide transparency for all parties. existing firms, new and transitioning firms, and home regulators. 2. second, there remains strong interest from international banks seeking a banking licence