The BoE has published the record of the Financial Policy Committee’s (FPC) meeting held on 30 June 2021. Meeting highlights include:
- The UK financial system has provided support to households and businesses to weather the economic disruption from the Covid pandemic, reflecting the resilience that has been built up since the global financial crisis
- The UK banking system has the capacity to continue to provide that support as the government’s support measures unwind
- The FPC expects banks to use all elements of their capital buffers to support the economy through the recovery. To support this, the FPC expects to maintain the UK countercyclical capital buffer rate at 0% until at least December 2021
- The FPC will continue to remain vigilant to debt vulnerabilities in the financial system that could amplify risks to financial stability
- The FPC emphasises that market participants should use the most robust alternative benchmarks available in transitioning away from use of LIBOR to minimise future risks to financial stability
- On cloud service providers, the FPC is of the view that additional policy measures to mitigate financial stability risks in this area are needed, and welcomes the engagement between the BoE, FCA and Treasury on how to tackle these risks.
The FPC’s next policy meeting will take place on 23 September.