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BoE raises lenders' capital requirements due to "pockets of risk"

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    BoE raises lenders' capital requirements due to "pockets of risk"

    Taken from Financial Reporter

    UK banks will have to raise an extra £11.4bn in capital requirements over the next 18 months after the Bank of England's Financial Policy Committee increased the countercyclical capital buffer rate to 0.5% with a further rise to 1% expected in November.

    The capital requirements aim to make financial institutions more resilient to economic risks.

    The FPC says current risks are at a standard level but warned of "pockets of risk that warrant vigilance" including a rapid increase in consumer credit and lending conditions in the mortgage market.

    Due to the increase in consumer credit, the Bank announced that it would be bringing forward the assessment of stressed losses on consumer credit lending in its 2017 annual stress test from November to September. This, it says, will help inform its assessment of any "additional resilience required against this lending".

    The Bank of England believes lending conditions in the mortgage market are becoming easier and that as a result, lenders may be placing "undue weight on the recent performance of loans in benign conditions".

    It therefore plans to 'clarify its existing insurance measures in the mortgage market', designed to prevent excessive growth in the number of highly indebted households.

    The FPC's Financial Stability Report also outlined 'possible financial stability implications' of the United Kingdom’s withdrawal from the European Union. It believes the scenario that would have the most impact on stability is one in which there is "no agreement in place at the point of exit".

    Citing direct effects of Brexit on financial services, the Bank raised concerns about the amount of legal and regulatory framework derived from EU law and the right of financial companies within the EEA to provide services across borders.

    The Financial Stability Report said the EEA agreement promotes "substantial cross-border provision of a wide range of financial services", noting that around £40bn of UK financial services revenues relate to EU clients and markets.

    It warned that there is "no generally applicable institutional framework for cross-border provision of financial services outside the European Union" and raised concerns that UK firms would no longer be able to provide services to EEA clients (and vice versa) in the same way, "or in some cases not at all".

    #2
    "The FPC's Financial Stability Report also outlined 'possible financial stability implications' of the United Kingdom’s withdrawal from the European Union. It believes the scenario that would have the most impact on stability is one in which there is "no agreement in place at the point of exit".

    Citing direct effects of Brexit on financial services, the Bank raised concerns about the amount of legal and regulatory framework derived from EU law and the right of financial companies within the EEA to provide services across borders.

    The Financial Stability Report said the EEA agreement promotes "substantial cross-border provision of a wide range of financial services", noting that around £40bn of UK financial services revenues relate to EU clients and markets.

    It warned that there is "no generally applicable institutional framework for cross-border provision of financial services outside the European Union" and raised concerns that UK firms would no longer be able to provide services to EEA clients (and vice versa) in the same way, "or in some cases not at all"."


    In other words Brexit is likely to bugger things up badly.
    No shit, Sherlock
    Hard Brexit now!
    #prayfornodeal

    Comment


      #3
      Originally posted by sasguru View Post
      "The FPC's Financial Stability Report also outlined 'possible financial stability implications' of the United Kingdom’s withdrawal from the European Union. It believes the scenario that would have the most impact on stability is one in which there is "no agreement in place at the point of exit".

      Citing direct effects of Brexit on financial services, the Bank raised concerns about the amount of legal and regulatory framework derived from EU law and the right of financial companies within the EEA to provide services across borders.

      The Financial Stability Report said the EEA agreement promotes "substantial cross-border provision of a wide range of financial services", noting that around £40bn of UK financial services revenues relate to EU clients and markets.

      It warned that there is "no generally applicable institutional framework for cross-border provision of financial services outside the European Union" and raised concerns that UK firms would no longer be able to provide services to EEA clients (and vice versa) in the same way, "or in some cases not at all"."


      In other words Brexit is likely to bugger things up badly.
      No shit, Sherlock
      In other words, zero percent ISAs here we come.
      http://www.cih.org/news-article/disp...housing_market

      Comment


        #4
        Originally posted by PurpleGorilla View Post
        In other words, zero percent ISAs here we come.
        Negative interest !

        Comment


          #5
          Brexit is going to boost the economy. Crush the saboteurs!

          Comment


            #6
            Originally posted by northernladyuk View Post
            Brexit is going to boost the economy. Crush the saboteurs!
            The UK economy is going down. Just not as fast as the EU.

            Comment


              #7
              Originally posted by BrilloPad View Post
              The UK economy is going down. Just not as fast as the EU.
              Phew!

              Comment


                #8
                Originally posted by northernladyuk View Post
                Phew!
                Its not good news. The next few years will be tough. If May takes her head out of her 4rse we will be okay.

                Comment

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