1. Judgement-Based Supervision in the UK : Challenges
Professor Joanna Gray (Newcastle Law School) and Peter Metzing (PhD candidate Newcastle University)

2. Origins of Judgement-Based Supervision
Contrasted with formulaic, mechanistic and “box-ticking” approaches to supervision
UK Financial Services Authority’s approach to supervision developed and in use until 2008 was often described as “Risk-based” and “principles-based”. Some called it “light touch”….

3. Judgements will be central - but about what?
Components of the Bank of England’s (acting through the PRA) approach to banking supervision
Judgements will be central - but about what?
Prospective/Forward looking – current risks and plausible risks
Focussed – on issues and firms that pose greatest risk to stability of the financial system

4. Obstacles to Judgement-led Supervision
People :
–wisdom, prescience beyond their years..?
--technical skills and “market savviness” or “market instincts” ?
Vision and Imagination :
– Emergent risks
- Plausible risks
Data challenges:
Contestability of Judgments:

5. Lawyers as help in the process of judgement led supervision rather than hindrance?
Data collection – Skilled Persons role
Assisting in the process of Supervisory Judgement formation

6. Dangers of data gathered in the supervisory process
  Is ignorance bliss – should the supervisor fear holding data it cannot analyse?
Risks to supervisor of failing to make the right judgements at the right time on basis of data that the benefit of hindsight aggregates or connects in a way the supervisor failed to do…