The Financial Services Authority (FSA) has published its Prudential Risk Outlook (PRO), which aims to identify major risks to financial stability in the UK.
It identifies a number of risks that could impact firms in the UK, which it will then use to focus its policy in the FSA's business plan due to be published later this month.
Risks highlighted by the PRO include the continued need for greater deleveraging required among financial firms, as well improved global capital and liquidity standards.
It also identifies a number of important areas of credit risk, relating in particular to commercial real estate in vulnerable euro-zone countries and in emerging markets facing rapid property price inflation.
Finally, it points to risks posed by a sustained period of low interest rates which it says could crystallise as and when interest rates return to more normal levels.
Commenting on the PRO, FSA chairman Lord Turner said: "In the face of these still important risks it is vital that banks focus on achieving further progress to sound funding positions, maintain high capital ratios and adequate provisions."
This week, Lord Turner also warned that a raft of new EU-level policy will still be needed to ensure financial stability following Basel III.
Source: www.compliancy-services.co.uk
It identifies a number of risks that could impact firms in the UK, which it will then use to focus its policy in the FSA's business plan due to be published later this month.
Risks highlighted by the PRO include the continued need for greater deleveraging required among financial firms, as well improved global capital and liquidity standards.
It also identifies a number of important areas of credit risk, relating in particular to commercial real estate in vulnerable euro-zone countries and in emerging markets facing rapid property price inflation.
Finally, it points to risks posed by a sustained period of low interest rates which it says could crystallise as and when interest rates return to more normal levels.
Commenting on the PRO, FSA chairman Lord Turner said: "In the face of these still important risks it is vital that banks focus on achieving further progress to sound funding positions, maintain high capital ratios and adequate provisions."
This week, Lord Turner also warned that a raft of new EU-level policy will still be needed to ensure financial stability following Basel III.
Source: www.compliancy-services.co.uk
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