As lending kept growing, the FPC is confident enough to raise that to 0.5 per cent of banks' risk-adjusted United Kingdom lending - meaning they should put aside another £5.7bn over the next year.
The HSBC global head of foreign exchange strategy told CNBC on Friday that the Bank of England (BOE) representatives that are pushing for an interest rate scramble have been wrong for the past eight years and there is no mark of them getting right now.
Overseeing contingency planning to mitigate risks to financial stability as the United Kingdom withdraws from the European Union.
The central bank's financial stability report showed consumer credit - credit cards, personal loans and motor finance, grew by 10.3 per cent in the 12 months to April 2017, described as "markedly faster than nominal household income growth". The BOE opted for a staggered approach because it's less likely to result in banks tightening lending in response.
This is normally published in November, but the FPC does not want to wait that long this year, given that consumer credit, which is often short-term debt, is growing at an annual pace of more than 10 per cent. "It's more targeted than a general base rate hit and more easily reversed should they see the need to do that in the near term". The buffer is created to be raised in good times to build resilience against potential future losses and relaxed in a downturn, to keep the economy flush with credit.
The increase of the minimum leverage ratio requirement to 3.25 per cent from 3 per cent is meant to restore the "level of resilience" delivered before the FPC decision to exclude central-bank reserves from the measure, the BOE said.Читайте также: Mosul residents struggle in city with liberation on horizon
The Bank of England has raised its requirements for the amount of cash British banks have to hold as it looks to build up capital buffers against a financial system shock.
His comments come after Andy Haldane, the Bank's chief economist, surprised markets last week by signalling that he was poised to vote for a rate hike in the second half of the year if growth remains stable.
Consistent with its previous commitment, restoring the level of resilience delivered by its leverage ratio standard to the level it delivered in July 2016 before the FPC excluded central bank reserves from the leverage ratio exposure measure: The FPC intends to set the minimum leverage requirement at 3.25% of non-reserve exposures, subject to consultation.
In an interview with BBC's Radio 5 Live, Mr Cunliffe said he wanted to see if Britain's growing export trade and increases in business investment could offset a slowdown in consumer spending before increasing rates from their record low of 0.25%.
The overall risks from United Kingdom exposures are at "neither particularly elevated nor subdued", according to the BOE.
Rather than threats to single consumers or companies, the bank's focus is now on shoring up the financial system against "the risk of cyber attack causing disruption to critical financial services on a scale that causes material disruption to the United Kingdom economy".При любом использовании материалов сайта и дочерних проектов, гиперссылка на обязательна.
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