Which of the following is a characteristic of PRA regulation?

The characteristic of PRA regulation that stands out is its judgment-based approach. This means that instead of relying solely on strict rules or a one-size-fits-all methodology, the PRA (Prudential Regulation Authority) emphasizes the importance of considering the specific circumstances and risks associated with different financial institutions.

This approach allows for regulatory flexibility, enabling the PRA to tailor its requirements according to the unique profiles of firms. It reflects a deeper understanding of the complexities within financial markets and recognizes that a nuanced assessment can lead to more effective regulation. By using judgment, the PRA can adapt to new challenges and developments in the financial landscape, promoting stability while supporting innovation and growth in the industry.