UK: Financial Policy Committee - remit and recommendations for the year ahead

Last month, the Chancellor set out, as required by the Bank of England Act 1998 (as amended by the Financial Services Act 2012), the remit and recommendations for the Financial Policy Committee for the year ahead: see here (pdf). The FPC published its response yesterday: see here (pdf). The FPC's response explained, amongst other things, the focus on potential risks from non-bank activities (noting that, by balance sheet size, nearly half of the UK financial system consists of non-bank financial institutions).

UK: The Capital Requirements (Capital Buffers and Macro-prudential Measures) Regulations 2014

The Capital Requirements (Capital Buffers and Macro-prudential Measures) Regulations 2014 were laid before Parliament yesterday. An explanatory memorandum is available here (pdf). The Regulations implement in part the provisions relating to capital buffers in Directive 2013/36/EU; they also make amendments to the Bank of England Act 1998 to specify the procedure for notifying proposed macro-prudential measures under Article 458 of Regulation (EU) No 575/2013.

UK: Bank of England Governor launches strategic plan

Dr Mark Carney, the Governor of the Bank of England, launched the Bank's strategic plan yesterday: see here. The plan contains fifteen core initiatives, including enhancing transparency: see here (pdf). A new organisational structure will be introduced on 1 June: see here (pdf). Dr Carney took the opportunity to speak about the new plan when he delivered the 30th annual Mais lecture yesterday: see here (pdf).

UK: Bank of England - senior appointments and the new deputy governor for banking and markets

The Chancellor today announced three new senior appointments at the Bank of England, the UK's central bank: see here. This includes the new position of deputy governor for banking and markets, about which the Governor spoke last week. This new deputy governor position does not currently exist within the statutory framework provided by the Banking Act 1998, recently amended by Part I the Financial Services Act 2012. The Chancellor has, however, announced today that it will be placed on a statutory basis "as soon as a suitable legislative opportunity arises".

UK: HM Treasury makes first recommendations to the Financial Policy Committee

Section 4 of the Financial Services Act 2012 inserted new provisions into the Bank of England Act 1998 in respect of the Financial Policy Committee, including a requirement that HM Treasury make recommendations to the FPC in respect of matters that the FPC should regard as relevant to its understanding of the Bank of England's financial stability objective. The first recommendations have been made: see here (pdf).

UK: FPC power to supplement capital requirements - draft policy statement published

Section 4 of the Financial Services Act 2012 inserts new Part 1A into the Bank of England Act 1998. Amongst the new provisions are those concerning the Financial Policy Committee, its composition, objectives and powers. The FPC will have the power to give directions to the Financial Conduct Authority and Prudential Regulation Authority requiring them to exercise their functions to ensure the implementation by a specific class of regulated person of macro-prudential measures (see section 9H). Section 9M requires the FPC, in respect of each macro-prudential measure, to prepare and maintain a written statement of the general policy that it proposes to follow in relation to the exercise of its power to give directions under section 9H. In this regard, the interim Financial Policy Committee yesterday published a draft policy statement concerning the power that the FPC will have under the new financial regulatory framework to supplement banks' capital requirements through the use of counter cyclical buffers (CCB) and sectoral capital requirements (SCR): see here (pdf). The paper describes the purpose of the CCB and SCR tools, their fit within the regulatory framework, to whom they will apply and when.