Bank of England Raises Buffer Rate as Stability Risks Grow
- FPC increases countercyclical buffer rate to 0.5% of RWAs
- `Brexit' vote poses risk to financial stability, FPC says
U.K. Conservative Party Division Over ‘Brexit’
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The Bank of England said banks should begin building up capital earmarked to support lending when the economy turns down, as the outlook for U.K. financial stability worsens.
The BOE’s Financial Policy Committee raised the countercyclical capital buffer rate for U.K. exposures to 0.5 percent of risk-weighted assets from zero, becoming binding from March 29 next year. The buffer applies to U.K. banks and building societies, as well as to branches of other European Union banks that lend into the country.