Supervisory regulation: reflections from the UKRN & Oxera joint conference

Following our joint conference on supervisory approaches to regulation in January 2026, the UKRN and Oxera Consulting have published a short note reflecting on key themes raised during the discussion.

The paper explores the emerging role of supervisory regulation, particularly in light of the Independent Water Commission’s proposals for the water sector. It examines how “constrained discretion” might work in practice, and how supervisory approaches could complement more traditional tools such as incentive regulation.

Drawing on insights from financial services and other sectors, the note highlights three core components of effective supervision: the exercise of sound judgement, the ability to gather and interpret meaningful information, and the prioritisation of regulatory effort towards the issues that matter most.

While supervisory regulation offers clear potential benefits, including greater flexibility, improved coordination, and more nuanced engagement with regulated firms – it also raises important challenges around governance, capability, and maintaining appropriate boundaries.

Overall, the paper sets out areas for further consideration as regulators explore how supervisory models can be designed and implemented effectively across different sectors.

You can read the full paper here.