General Information & Client Service
  • Americas: +1.212.553.1653
  • Asia: +852.3551.3077
  • China: +86.10.6319.6580
  • EMEA: +44.20.7772.5454
  • Japan: +81.3.5408.4100
Media Relations
  • New York: +1.212.553.0376
  • London: +44.20.7772.5456
  • Hong Kong: +852.3758.1350
  • Tokyo: +813.5408.4110
  • Sydney: +61.2.9270.8141
  • Mexico City: +001.888.779.5833
  • Buenos Aires: +0800.666.3506
  • São Paulo: +0800.891.2518
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

Related Insights
News

BCBS Finds Liquidity Risk Management Principles Remain Fit for Purpose

BCBS completed a review of its 2008 Principles for sound liquidity risk management and supervision. The review confirmed that the principles remain fit for purpose.

January 17, 2019 WebPage Regulatory News
News

HKMA Urges Local Banks to Start Working on FRTB Implementation

HKMA announced that it plans to issue a consultation paper on the new market risk standard in the second quarter of 2019.

January 17, 2019 WebPage Regulatory News
News

EBA Finalizes Guidelines for High-Risk Exposures Under CRR

EBA published the final guidelines on the specification of types of exposures to be associated with high risk under the Capital Requirements Regulation (CRR). The guidelines are intended to facilitate a higher degree of comparability in terms of the current practices in identifying high-risk exposures.

January 17, 2019 WebPage Regulatory News
News

MAS Guidelines on Risk Mitigation Requirements for OTC Derivatives

MAS published guidelines on risk mitigation requirements for non-centrally cleared over-the-counter (OTC) derivatives contracts.

January 17, 2019 WebPage Regulatory News
News

BoE Publishes the Schedule for Statistical Reporting for 2019

BoE published the updated schedule for statistical reporting for 2019. The reporting institutions use the online statistical data application (OSCA) to submit statistical data to BoE.

January 16, 2019 WebPage Regulatory News
News

PRA Delays Final Direction on Reporting of Private Securitizations

PRA and FCA have delayed the issuance of final direction, including the final template, on reporting of private securitizations, from January 15, 2019 to the end of January 2019.

January 15, 2019 WebPage Regulatory News
News

SNB Updates Forms on Supervisory Reporting for Banks

SNB published Version 1.7 of reporting forms (AUR_U, AUR_UEA, AUR_UES, AURH_U, AUR_K, AUR_KEA, and AURH_K) and the related documentation for supervisory reporting on an individual and consolidated basis.

January 15, 2019 WebPage Regulatory News
News

BCBS Finalizes Market Risk Capital Framework and Work Program for 2019

BCBS published the final framework for market risk capital requirements and its work program for 2019. Also published was an explanatory note to provide a non-technical description of the overall market risk framework, the changes that have been incorporated into in this version of the framework and impact of the framework.

January 14, 2019 WebPage Regulatory News
News

EBA Single Rulebook Q&A: First Update for January 2019

EBA published answers to 13 questions under the Single Rulebook question and answer (Q&A) updates for this week.

January 11, 2019 WebPage Regulatory News
News

PRA Proposes to Amend Supervisory Statement on Credit Risk Mitigation

PRA published the consultation paper CP1/19 that is proposing changes to the supervisory statement (SS17/13) on credit risk mitigation.

January 10, 2019 WebPage Regulatory News
RESULTS 1 - 10 OF 2473