FPC focuses on risks from the housing market: BoE has published its half-yearly Financial Stability Report and a record of the latest meeting of its Financial Policy Committee (FPC).The Report notes that risks to financial stability arising from the housing market could increase as a result of house price inflation, growing household indebtedness and the erosion of underwriting standards during the expansive phase of the credit cycle. In light of these potential risks, the FPC has welcomed PRA's announcement that it will put an end to the capital relief for new household lending    as well as    the Treasury's decision to concentrate the Funding for Lending Scheme on non-financial corporates. Regarding underwriting  standards, FPC has recommended that the FCA    require mortgage lenders to have regard to any future FPC recommendation on the appropriate interest rate stress tests to be used in the affordability assessment under the new rules resulting from the Mortgage Market Review. FPC will also monitor the affordability tests applied by lenders. In addition, FPC also discussed BoE's Governor's letter to the House of Commons Treasury Committee's Chairperson in relation to the Chancellor of Exchequer's  request that FPC carry out an annual review of the impact of the Help to Buy Scheme on financial stability. The letter clarified that FPC has no power to require the Treasury to vary or cancel the scheme, and that it is PRA which has provided advice to the Treasury on the prudential implications of the scheme. (Source: Financial Policy Committee Meetings and Response from Mark Carney on Andrew Tyrie's Letter on Help to Buy)