The Prudential Regulation Authority (PRA) has put forward ideas for simpler “but no less resilient” rules for lenders neither systemically important nor internationally active.

New framework ideas have been published in the form of a discussion paper, views and comments on which the PRA has asked to receive by Friday 9 July this year.

The PRA argues that, “the cost of understanding, interpreting, and operationalising prudential regulation falls more heavily upon smaller firms.

“The aim is to simplify regulation in ways that reduce those costs while still ensuring all PRA-regulated firms face prudential rules and expectations that maintain their safety and soundness.”

The discussion paper details approaches as to how firms that may fall under this new regime will be defined, whether the new framework should be built from scratch or modified from the existing rules currently used – adopted from those in the European Union – before moving onto subjects such as new capital requirement rules, regulatory reporting mechanisms and how the new framework can adapt to changing economic events and any unintended consequences of the initial rules.

The PRA also says that it would like the framework to lower barriers to growth – admitting that the envisioned graduated framework, in which rules become more complex as a lender’s activities become more so, could stymie expansion.

PRA chief executive and prudential regulation deputy governor Sam Woods says: “Making our regime for small firms simpler, but not weaker, will be good for safety and soundness and for competition.

“We therefore plan to simplify our rules, and have today set out many different ways in which we could do this for deposit-takers in order to stimulate a public debate about the best way forward.

“I have no doubt that any firms who might be affected will give us strong views on their preferences, and I also encourage everyone else with an interest in this topic to let us know what they think.”