The Bank of England (BoE) and the Prudential Regulation Authority (PRA) have announced the creation of a new cost benefit analysis panel to enhance transparency and scrutiny in financial policymaking.

The panel, established under the Financial Services and Markets Act 2000, will provide advice on cost benefit analyses for proposed new rules or amendments to existing regulations for firms and financial market infrastructures.

Laurel Powers-Freeling, a seasoned businessperson with extensive experience in banking, consultancy, and insurance, has been appointed chair of the panel. Her appointment, effective from 24 June 2024 for an initial three-year term, was approved by HM Treasury.

The panel comprises six members, including Stephen Gibson, an economist and chair of the UK Government's Regulatory Policy Committee; Martina Garcia, an independent non-executive director at Haitong Bank; Andrew Maclaren, an insurance and investment actuary at the Government Actuary's Department; David Aikman, a professor of finance at King's Business School; and Kristy Robinson, managing director in JP Morgan Chase's Accounting Policies and Advisory Group.

Sam Woods, deputy governor for prudential regulation and chief executive officer of the PRA, emphasised the importance of cost benefit analysis in policy development. Sarah Breeden, deputy governor for financial stability and chair of the Bank's Financial Market Infrastructure Committee, welcomed the panel as a valuable addition to the UK's financial regulation framework.

The panel held its first meeting on 9 July 2024 to discuss its terms of reference and the PRA's approach to cost benefit analysis. It will begin reviewing cost benefit analyses of proposed new policies from 1 August 2024 and plans to discuss the Bank's approach to cost benefit analysis in early autumn.

A vacancy for an additional member from a PRA-authorised firm is expected to be filled once the recruitment process is completed.

This initiative aims to strengthen the Bank of England's policymaking process by ensuring thorough evaluation of the costs and benefits associated with new financial regulations.

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