All RE5 questions
Regulatory Bodies Twin Peaks Financial Stability
Under the 'Twin Peaks' model, what is the primary role of the **Prudential Authority (PA)**?
RE5 practice question with a worked answer. This is one of hundreds of FSCA RE5 questions in the RegulatoryExams question bank.
- a) To supervise the safety and soundness (solvency) of financial institutions like banks and insurers.Correct
- b) To regulate the market conduct of all FSPs.
- c) To resolve all consumer complaints against FSPs.
- d) To combat money laundering and issue fines.
Why this is the answer
The 'Twin Peaks' model divides regulation. The Prudential Authority (PA) is 'Peak 1' and is responsible for 'prudential' supervision, which means ensuring the financial safety and soundness (solvency) of banks, insurers, and other key financial institutions.
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