View more on these topics

Bank of England issues warning on post-Brexit financial stability

Bank of England BoE Bank 480

The Bank of England has called for financial services companies to prepare for Brexit as it launches a new stress test for UK banks.

The Financial Policy Committee said today that an additional stress test with a seven year timeframe will run alongside its annual cyclical stress test.

The test will assess how resilient the UK banking system will be if “recent headwinds to bank profitability persist and intensify”, and will consider weak global growth, persistently low interest rates, falling world trade.

Cross-border banking activity and the increased pressure on large UK banks from smaller banks and non-banks will also be taken into account.

At its meeting on 22 March, the FPC said it is also considering how to counter businesses creating increasingly complex structures post Brexit, which could “reduce the resilience of the UK financial system”.

With Article 50 being triggered on Wednesday, the FPC says there are “a range of possible outcomes”, with risks to financial stability “influenced by the orderliness of the adjustment to the new relationship between the United Kingdom and the European Union”.

The FPC says: “The FPC will assess the financial stability implications of firms’ plans to adapt to the United Kingdom’s withdrawal from the European Union,”

“The FPC supports the work of the Prudential Regulation Authority and FCA to ensure regulated firms have comprehensive plans in place to operate in a range of possible outcomes. Sudden adjustment could disrupt the provision of market liquidity and investment banking services, particularly to the EU real economy, which could spill back to the UK economy through trade and financial linkages.”



Bank votes eight to one to hold interest rates

The Bank of England’s Monetary Policy Committee has voted to hold the base rate at 0.25 per cent. The committee voted by a majority of eight to one as Kristin Forbes – who is set to stand down from the MPC in June – voted in favour of a 25 basis point increase. The MPC voted unanimously […]


Ex-Bank boss calls on Govt to put pensions before Brexit

Former Bank of England governor Lord Mervyn King says politicians are obsessed with Brexit to the detriment of more fundamental issues such as pension saving and long-term care. Speaking on BBC’s Newsnight programme last night, Lord King said there was a risk “big questions” will not be addressed if the sole focus is the UK’s […]

Sterling occupies temporary ‘sweet spot’, says Bank of England deputy

Sterling is set to occupy a “sweet spot” for businesses until the UK leaves the European Union, the Bank of England’s deputy governor has argued in a speech at Imperial College today. Ben Broadbent, who has specific responsibility within the Bank for monetary policy, says the currency is in the unusual situation of reacting to a predicted negative […]

Certification guide

Guide: how to… certify your pension scheme

Certification is highly complex and surrounded by a minefield of information and auto-enrolment jargon, which can make it very difficult to understand. However, for many employers it is a necessary process that must be executed successfully.

Scheme pays explained

By Fiona Hanrahan, senior product insight and technical support analyst We’ve received lots of queries on scheme pays and when it can be used. This article explains how it works and the conditions which apply. What is ‘scheme pays’? If an individual exceeds the annual allowance (AA) and an AA tax charge is due, they […]


News and expert analysis straight to your inbox

Sign up


There are 4 comments at the moment, we would love to hear your opinion too.

  1. Why would Brexiteers take any notice of this warning? They have been warned from the very outset. But blind faith rules where sober judgement is heresy.

    • There is an article today in the Telegraph that states the top 5 things we will achieve from brexit are getting back bendy bananas, more powerful vacuums, removal of green energy initiatives and the working time directive and a return to incandescent lightbulbs.

      I’m sure you’ll agree that these are the most important issues facing Britain and the world right now.

  2. The same people issuing the same “End of the World” situation as they said would happen if the referendum vote was to leave? They and other “experts” were wrong then and I think they will be wrong again. Will it all be plain sailing? No of course not. Will there be compromises from UK & EU? Of course there will. Will a deal be struck ? I think Yes as both sides want good outcome for their respective nations. We can then get on with doing deals with as many of the other 172 countries around the world as we want to. It will be a different world post Brexit, but I fully believe it will be for the better from the medium term onwards

    • How can these ‘experts’ be wrong about the effects of leaving when we are yet to actually leave? I would suggest you hold off on your predictions until 2020, when the effects of the vote will actually be known.

Leave a comment


Why register with Money Marketing ?

Providing trusted insight for professional advisers. Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and thought leadership.

News & analysis delivered directly to your inbox
Register today to receive our range of news alerts including daily and weekly briefings

Money Marketing Events
Be the first to hear about our industry leading conferences, awards, roundtables and more.

Research and insight
Take part in and see the results of Money Marketing's flagship investigations into industry trends.

Have your say
Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

Register now

Having problems?

Contact us on +44 (0)20 7292 3712

Lines are open Monday to Friday 9:00am -5.00pm