Prudential Sourcebook Requirements

Definition ∞ Prudential Sourcebook Requirements are a set of rules and guidelines issued by financial regulators, typically focusing on the financial soundness and risk management of regulated firms. These requirements dictate capital adequacy, liquidity standards, and internal control frameworks that institutions must maintain to ensure their stability and protect customers. They are designed to prevent systemic risks and ensure that firms can withstand adverse market conditions. Adherence to these standards is mandatory for licensed financial entities.
Context ∞ In crypto news, discussions around Prudential Sourcebook Requirements often relate to how traditional financial regulations apply to digital asset service providers. A key debate involves adapting these capital and liquidity rules for novel crypto business models and volatile digital assets. Future developments will see regulators potentially creating bespoke prudential frameworks for the crypto sector, balancing innovation with financial stability concerns.