The Financial Policy Committee (FPC) has published its biannual Financial Stability Report and made the following new recommendations:

  • FCA and PRA should assess vulnerability to increases in long-term interest rates and credit spreads;
  • the Liquidity Coverage Ratio (LCR) should be set at 80% until January 2015, rising thereafter to 100% in January 2018. This contrasts with the revised Basel Committee standards, which require that the LCR should not start applying until January 2015 and then only at 60%;
  • work should continue on comparability of Pillar 3 disclosures to the market;
  • major UK banks should start complying with the recommendation of the Enhanced Disclosure Task Force (EDTF);
  • PRA should consider the feasibility of major UK banks also calculating their capital ratios using the standardised approach;
  • Government, regulators and industry should improve and test resilience to cyber attack.

(Source: Financial Stability Report June 2013)