The Bank of England said Britain’s housing-market recovery is gaining momentum and its Financial Policy Committee is ready to act if any risks to stability emerge.
While the FPC said property activity remains below its historic average, it “judged that it should closely monitor developments in the housing market and bank’ underwriting standards.”
In a statement published in London today following its meeting on Sept. 18, the panel also said it would be “vigilant to potential emerging vulnerabilities.”
The comments come amid criticism from politicians including Business Secretary Vince Cable that government measures to aid potential homebuyers may help to stoke a property bubble.
While the Royal Institution of Chartered Surveyors urged the FPC to set a cap on price increases, BOE Governor Mark Carney has downplayed the concerns about the housing market.
The FPC said today that it has a “range of tools” to address any risks. These include guidance on underwriting standards by banks, additional capital requirements on mortgage loans and the tightening of lenders’ affordability tests.
Rate Risk
The FPC, set up to monitor financial stability, didn’t make any new recommendations in its statement today. It asked the Financial Conduct Authority and the Prudential Regulation Authority in June to examine the vulnerability of financial institutions to a jump in interest rates and report back this month.
It said today a preliminary probe suggested that a moderate rise “did not pose an immediate threat to major banks and insurance companies.”
The panel highlighted that responses to the review didn’t take account of “more significant stresses nor potential amplification channels.” It also said that vulnerabilities of hedge funds “needed to be looked at more closely.”
The FPC said that global economic prospects have improved since its last meeting in June, though “underlying vulnerabilities in the euro area remained.”
It also noted the impact on long-term rates from the prospect of the Federal Reserve tapering its monthly bond purchases this year.
The BOE committee said it is continuing work on a planned stress-test framework for U.K. banks and will publish a discussion paper on this on Oct. 1, when it will release a more detailed record of its Sept. 18 meeting.
Addressing the issue of hackers potentially accessing sensitive information at financial institutions, the FPC said it wants the U.K. Treasury and regulators to ensure that banks and infrastructure providers have a “high level of protection against cyber attacks.”
bloomberg.com
While the FPC said property activity remains below its historic average, it “judged that it should closely monitor developments in the housing market and bank’ underwriting standards.”
In a statement published in London today following its meeting on Sept. 18, the panel also said it would be “vigilant to potential emerging vulnerabilities.”
The comments come amid criticism from politicians including Business Secretary Vince Cable that government measures to aid potential homebuyers may help to stoke a property bubble.
While the Royal Institution of Chartered Surveyors urged the FPC to set a cap on price increases, BOE Governor Mark Carney has downplayed the concerns about the housing market.
The FPC said today that it has a “range of tools” to address any risks. These include guidance on underwriting standards by banks, additional capital requirements on mortgage loans and the tightening of lenders’ affordability tests.
Rate Risk
The FPC, set up to monitor financial stability, didn’t make any new recommendations in its statement today. It asked the Financial Conduct Authority and the Prudential Regulation Authority in June to examine the vulnerability of financial institutions to a jump in interest rates and report back this month.
It said today a preliminary probe suggested that a moderate rise “did not pose an immediate threat to major banks and insurance companies.”
The panel highlighted that responses to the review didn’t take account of “more significant stresses nor potential amplification channels.” It also said that vulnerabilities of hedge funds “needed to be looked at more closely.”
The FPC said that global economic prospects have improved since its last meeting in June, though “underlying vulnerabilities in the euro area remained.”
It also noted the impact on long-term rates from the prospect of the Federal Reserve tapering its monthly bond purchases this year.
The BOE committee said it is continuing work on a planned stress-test framework for U.K. banks and will publish a discussion paper on this on Oct. 1, when it will release a more detailed record of its Sept. 18 meeting.
Addressing the issue of hackers potentially accessing sensitive information at financial institutions, the FPC said it wants the U.K. Treasury and regulators to ensure that banks and infrastructure providers have a “high level of protection against cyber attacks.”
bloomberg.com
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