BoE: All roads lead towards FSR today – MUFG

Lee Hardman, Currency Analyst at MUFG, notes that the BoE’s Financial Policy Committee met last week as well and are scheduled to release their bi-annual Financial Stability Report today.

Key Quotes

“Bloomberg has reported that the BoE is planning to announce that it will cut back banks’ capital requirements, reversing a decision it took in March to raise the countercyclical buffer for UK exposures according to people with knowledge of the discussions.

According to the FT, halting the buffer would have no immediate practical impact on banks’ balance sheets as the BoE only told banks in March that they would have to start building up extra capital from 29th March 2017. However, it would provide an important signal showing that the BoE is willing to act to support credit conditions.”