Which of the following is a responsibility of the Prudential Regulation Authority?

The responsibility of the Prudential Regulation Authority includes authorizing and regulating banks. This role is crucial as the Prudential Regulation Authority (PRA) is part of the Bank of England and is tasked with ensuring the stability and integrity of the financial system in the UK. By regulating banks, the PRA aims to promote the safety and soundness of financial institutions, which helps maintain confidence in the banking sector and protects consumers. The PRA assesses the financial health of banks and other significant financial institutions to ensure they operate within a framework that mitigates risks, which can also preserve the stability of the overall economy.

In contrast, setting interest rates for loans is typically the responsibility of a central bank's monetary policy committee rather than a regulatory body like the PRA. Managing central bank reserves pertains to the operational functions of a central bank, which also falls outside the purview of the PRA. Conducting economic research, while important for informing policy decisions, is not a direct regulatory responsibility of the PRA, which is focused on oversight and regulation of financial institutions.