BoE publishes FPC meeting record: BoE has published details of the Financial Policy Committee (FPC) meeting on 24 March. FPC discussed a range of factors impacting the macroeconomic and financial environment, including;

  • global risk, including the dangers to the Eurozone of a Greek default;
  • market liquidity risks;
  • cyber risk;
  • domestic risks, including the rising UK current account deficit;
  • underwriting standards in UK commercial real estate and leveraged loan markets;
  • banking system resilience, including encouraging CET1 and leverage ration increases among UK banks; and
  • risk to financial stability from climate change, including the move away from fossil fuels, and effects of extreme weather.

As a result of this analysis FPC decided to maintain the countercyclical capital buffer rate for UK exposures at 0%. (Source: Record of the Financial Policy Committee 24 March 2015)

BoE makes FX recommendations: Mark Carney has written to Michael Cross, Chair of the London Foreign Exchange Joint Standing Committee (LFEJSC), regarding the implementation of the Financial Stability Board's (FSB) recommendations for FX benchmarks reform. Mr Carney asks that LFEJSC report on market participants' progress with regards to steps taken:

  • by industry to develop independent netting and execution facilities for transacting fix orders;
  • by market participants to price fixing transactions in a manner that is transparent and consistent with the risk of accepting the transactions;
  • by banks to establish and enforce their internal guidelines and procedures for collecting and executing fixing orders, including separate processes for handling the orders;
  • to ensure no unnecessary information is shared among market-makers about their trading positions;
  • by market-makers to ensure private information is not passed to clients or other counterparties that might enable those counterparties to anticipate the flows of other clients or counterparties, including around the fix;
  • by banks to establish and enforce their internal systems and controls to address potential conflicts of interest arising from managing customer flow;
  • to adopt codes of conduct that describe best practices for trading foreign exchange; and
  • by market participants to more strongly show compliance with the codes of various foreign exchange committees, as well as participants' internal codes of conduct.

Mr Carney requests that the committee report the status of its members as at 30 June and send the report to him by 31 July. (Source: Implementation of FSB Recommendations for FX Benchmark Reforms)