BOE FPC says banking system could continue to support economy through disorderly Brexit
BOE FPC report now out 16 March
- Brexit risks do not warrant additional capital buffers for banks
Counter Cyclical Capital Buffer unchanged At 1%
UK banks facing tougher hurdles In 2018 stress test
Domestic risk appetite has risen since November
To revisit CCYB level in June
Doesn't see cryptocurrencies as a threat to financial stability
UK current account increasingly funded by capital inflows, this increases reliance on confidence of foreign investors
Says the FPC:
While the outlook for global growth has strengthened further, there are material risks associated with interest rate volatility. The principle risks are in debt markets. Across major markets, spreads between corporate and sovereign bond yields remain compressed, particularly for high-yield corporate bonds.
Against that market backdrop, risks stemming from corporate debt in the United States have continued to build. Financial vulnerabilities in China remain elevated.
Ntg to faze markets understandably. GBPUSD 1.3970 but EURGBP back up to 0.8826 from 0.8816 as EURUSD nudges higher and takes out 1.2330 sell interest. Option interest at 1.2300 and 1.2350 in play