United Kingdom: Financial Sector Assessment Program-Select Issues in Systemic Risk Oversight and Macroprudential Policy

Author: International Monetary Fund. Monetary and Capital Markets Department

Volume/Issue: Volume 2022 Issue 104

Publication date: April 2022

ISBN: 9798400207075

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Topics covered in this book

This title contains information about the following subjects. Click on a subject if you would like to see other titles with the same subjects.

Banks and Banking , Finance , Economics- Macroeconomics , Money and Monetary Policy , International - Economics , FPC mortgage market Recommendations , housing price development , mortgage market , FPC member , policy measure , policy action , affordability stress test , Financial sector stability , Systemic risk , Stress testing , Countercyclical capital buffers , Financial sector risk , Global

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Summary

The United Kingdom’s macroprudential policy framework has proven its effectiveness. After the Global Financial Crisis (GFC) of 2007–09, the United Kingdom assigned the Bank of England (BOE) a clear financial stability mandate, created a new Financial Policy Committee (FPC) to set macroprudential policy, and shifted to a “twin peaks” model of financial oversight. The 2016 Financial Sector Assessment Program (FSAP) concluded that the new framework appeared appropriate for effectively conducting macroprudential policy. However, the framework was then relatively new. The 2021 FSAP represents an opportunity to review its performance in building systemic resilience through the financial cycle, including the market volatility resulting from the Brexit vote and the COVID-19 pandemic.