BoE Says UK Banking System Resilient To Economic Shocks
The UK banking system is resilient to a wide range of possible economic outcomes, the Financial Policy Committee of the Bank of England said Friday.
The FPC said the banking system has the capacity to continue to support households and businesses even if economic outcomes are considerably worse than currently expected.
The report was released after Prime Minister Boris Johnson said there is strong possibility that the UK will fail to strike a trade deal with the EU.
The FPC expects countercyclical capital buffer rate to remain at zero percent until at least the fourth quarter of 2021.
The FPC viewed that the eventual pace of return to a standard 2 percent CCyB rate will depend on banks’ ability to rebuild capital while continuing to support households and businesses.
Financial sector preparations for the end of the transition period with the EU are now in their final stages.
According to FPC, the financial sector is prepared to limit disruption to financial services. Most risks to financial stability that could arise from disruption to the provision of cross-border financial services at the end of the transition period have been mitigated, the bank added.
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