Featured Product

    BoE Publishes Financial Stability Report in June 2018

    June 27, 2018

    BoE published the financial stability report, which sets out view of the Financial Policy Committee (FPC) on the stability of the UK financial system and what it is doing to remove or reduce any risks to the system. In the recent months, there has been some reduction in domestic risk appetite, although it remains strong. Moreover, risks from global vulnerabilities remain material and have increased.

    The report highlights that the 2017 stress test showed that the UK banking system is resilient to severe domestic, global, and market shocks. FPC is maintaining the UK countercyclical capital buffer (CCyB) rate at 1%. Furthermore, FPC continues to judge that the UK banking system could support the real economy through a disorderly Brexit. The 2017 stress test encompassed a wide range of UK macroeconomic outcomes that could be associated with Brexit. As it has set out previously, FPC judges that Brexit risks do not warrant additional capital buffers for banks. FPC is continuing to monitor preparations to mitigate disruption to financial services that could arise from Brexit. The biggest remaining risks of disruption are where action is needed by both the UK and EU authorities, such as ensuring the continuity of existing derivative contracts. As yet, EU has not indicated a solution analogous to a temporary permissions regime. FPC welcomes the establishment, in April, of a technical working group, chaired by ECB and BoE, on risk management in the area of financial services in the period around March 30, 2019.

    FPC is setting standards for how quickly critical financial companies must be able to restore vital services following a cyber attack. It plans to test them against the cyber stress tests.The Bank will test that firms would be able to meet the standards of FPC for recovering services. Additionally, continued reliance of financial markets on Libor poses a risk to financial stability that can be reduced only through a transition to alternative rates. FPC will monitor progress and report regularly. Good progress has been made to establish potential alternatives to Libor. In the UK, the sterling overnight index average (SONIA) is the preferred alternative and two important market‑led consultation exercises are due to be conducted soon. However, as long as the outstanding stock of contracts maturing after 2021 that reference Libor continues to increase, so will the associated medium‑term financial stability risks. Overall, FPC is working to ensure that the UK financial system has the necessary resilience to meet the needs of UK households and businesses in good times and bad, whether risks originate at home or abroad.

     

    Related Links

    Keywords: Europe, UK, Banking, Financial Stability Report, Brexit, Cyber Risk, Stress Testing, FPC, BoE

    Featured Experts
    Related Articles
    News

    ECB Allows Temporary Relief in Leverage Ratio Amid COVID-19 Pandemic

    ECB published a decision allowing the euro area banks under its direct supervision to exclude certain central bank exposures from the leverage ratio.

    September 21, 2020 WebPage Regulatory News
    News

    ESAs Launch Survey on Templates for Product Disclosures Under SFDR

    ESAs launched a survey seeking feedback on the presentational aspects of product templates under the Sustainable Finance Disclosure Regulation (SFDR or Regulation 2019/2088).

    September 21, 2020 WebPage Regulatory News
    News

    ECB Proposes Integrated Reporting Framework to Reduce Burden for Banks

    ECB published input of the European System of Central Banks (ESCB) into the EBA feasibility report on reducing the reporting burden for banks in EU.

    September 21, 2020 WebPage Regulatory News
    News

    ECB Finalizes Methodology to Assess CCR and A-CVA Risk of Banks

    ECB finalized the guide on assessment methodology for the internal model method for calculating exposure to counterparty credit risk (CCR) and the advanced method for own funds requirements for credit valuation adjustment (A-CVA) risk.

    September 18, 2020 WebPage Regulatory News
    News

    EBA Provides Opinion on Definition of Credit Institution in CRR

    EBA published an Opinion addressed to EC to raise awareness about the opportunity to clarify certain issues related to the definition of credit institution in the upcoming review of the Capital Requirements Directive and Regulation (CRD and CRR).

    September 18, 2020 WebPage Regulatory News
    News

    APRA Consults on Alignment of Daily Liquidity Report for Banks

    APRA is consulting on updates to ARS 210.0, the reporting standard that sets out requirements for provision of information on liquidity and funding of an authorized deposit-taking institution.

    September 17, 2020 WebPage Regulatory News
    News

    FED Releases Scenarios for Second Round of Stress Tests on Banks

    FED released hypothetical scenarios for a second round of stress tests for banks.

    September 17, 2020 WebPage Regulatory News
    News

    FED to Temporarily Revise FR Y-14 Reports to Conduct Stressed Analysis

    FED is proposing to temporarily revise the capital assessments and stress testing reports (FR Y-14A/Q/M) to implement the changes necessary to conduct stressed analysis in connection with the re-submission of capital plans, using data as of June 30, 2020.

    September 17, 2020 WebPage Regulatory News
    News

    FED Revises Information Collection Under Market Risk Capital Rule

    FED adopted a proposal to extend for three years, with revision, the information collection under the market risk capital rule (FR 4201; OMB No. 7100-0314).

    September 17, 2020 WebPage Regulatory News
    News

    EBA Seeks Input on ESG Disclosure Practices of Banks

    EBA published a voluntary online survey seeking input from credit institutions on their practices and future plans for Pillar 3 disclosures on the environmental, social, and governance (ESG) risks.

    September 17, 2020 WebPage Regulatory News
    RESULTS 1 - 10 OF 5809