TITLE: The key regulatory requirements that a socially responsible bank will be required to meet
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Introduction
Over recent years, the firm’s responsibility exceeds the notion of meeting only shareholders’ expectations to the position of fulfilling the stakeholder’s demands. Studies on CSR have worked out towards protecting the organization from legitimacy threats. The banking regulation guides the supervision and governance of the high-level overview, including liquidity rules, regulatory bodies, international standards roles, legislation, liquidation regimes, licensing, and recent trends within bank regulations. Before setting a bank in England that is socially responsible, one will have to meet several regulatory requirements. Some of these requirements include (Ahmed, 2010);
Legislation
The financial services and Market Act 200(FSMA) is the key source of the framework used in governing the regulations concerning financial and banking services in the UK. For any bank to start will have to meet the primary source of its capital, advantage, and liquidity requirements.
Regulatory authorities
The Prudential Regulation Authority PRA has the main objective of promoting safety and soundness for the institutions that are authorized by PRA. The PRA ensures that the banking carries its business to avoid adverse effects stability conditions of the UK financial sectors. By the banking meeting their requirements, it indicates that the bank will compete in a regulated way.
Bank licenses
The licenses regulate the manner the bank will operate. The license regulates the deposits accepting as core banking activity (Oyegunle and Weber,2015). The bank operates according to the EU regulatory framework, in that they are deposit takers. Accepting deposits holds that activities are received through the means the money is received and lent to the others (Article 5, RAO)
Clearly define the Organization of banks.
This includes whether the bank is legal and in which the PRA requires this particular bank a deposit taker to be a partnership or else a body corporate. In case the bank is headquartered in the UK, this bank is required to be registered as a limited company, or it can be registered as a private limited. The banks are also required to meet the PRA remuneration codes and which necessitates implementing remuneration requirements. The rules set on the risk management of the company monitor and manage the potential risk. Examples of the banking sectors’ risks include liquidity risk, residual risk, operational risk, market risk, and concentration risk (Campbell and Slack, 2011).
Conclusion
Following the previous Global Financial Crisis (GFC), most banks face growing pressures in ensuring that they are stable in their financial performance. These acts also have to ensure that the banks are well in their environmental and social dimensions. The banks’ act has been stable in their operations, and can be successfully attained through these banks, internalizing their environmental and social activities and operations (Adams, 2004). Secondly, the growing pressures ensure that these banks act as the environmental guards that oversee how the clients are compliant to the environmental standards and on loan granting and declining.
References
Adams, C.A., 2004. The ethical, social, and environmental reporting‐performance portrayal gap. Accounting, Auditing & Accountability Journal.
Ahmed, S., 2010. Institutions matter for development: Role of the banking sector.
Campbell, D., and Slack, R., 2011. Environmental disclosure and environmental risk: Sceptical attitudes of UK sell-side bank analysts. The British Accounting Review, 43(1), pp.54-64
Oyegunle, A., and Weber, O., 2015. Development of sustainability and green banking regulations: Existing codes and practices.