Today, there are a few areas I would like to focus on: First, I will very briefly recap our Op Res policy, including our expectations of firms and the links to other key policy areas such as outsourcing and Critical Third Parties (CTPs); Second, I will share with you some initial assessments of firms’ progress based on our supervisory work on UK banks and building societies so far; and Finally, I will cover what is coming up next in our Op Res roadmap; this includes our expectations around what firms should be doing, and the supervisory steps the PRA will be taking. 1. The PRA’s operational resilience policy 1/6  BIS central bankers' speeches  Starting with the first of those points, I will provide a short recap of our expectations of firms in the Op Res policy. I will keep this brief as I am aware that many of you will already be very familiar with our expectations. In particular, there are three particular policy expectations that I will draw out. i) Important Business Services The first is the requirement for firms to identify their IBS. Here we expect firms to take a holistic approach and consider all parts of their business in order to identify the full suite of services they offer, and then which of those should be deemed “important”. The definition of “importance” should be based on a service being provided to an external end user and having the potential to threaten regulatory objectives in the event of a disruption.
And ultimately, where we identify that firms have taken an approach which is not consistent with the aims of the policy, then we will certainly let those firms know. Findings on impact tolerances On impact tolerances it’s clear from our work that, whilst progress has again been made, firms have found this more challenging than identifying IBS. This is in part due to the complexity of defining tolerances for the different regulatory objectives of customer harm or market integrity 3/6  BIS central bankers' speeches  versus safety and soundness, and – for the largest firms – financial stability. For example, we have seen that several of the IBS that have been submitted by firms were accompanied by an impact tolerance for customer harm or market integrity but did not include one for safety & soundness, and an even higher number did not include one for financial stability. These are gaps which we expect firms to fill as a matter of priority. We also noted that the granularity with which firms defined their IBS impacted the tolerances they then defined.