BoE and ECB agree enhanced stability measures: BoE and ECB have agreed a set of measures aimed at enhancing financial stability in relation to centrally cleared markets within the EU. The measures are:

  • enhanced arrangements for information exchange and cooperation regarding UK CCPs with significant euro-denominated business; and
  • extending the scope of their standing swap line so it could if necessary facilitate multi-currency liquidity support by central banks to CCPs established in the UK and the euro area respectively. CCP liquidity risk management should still be the CCPs' own responsibility.

(Source: BoE and ECB Agree Enhanced Stability Measures)

BoE publishes stress test details: BoE has published details of the 2015 stress test for the UK's largest banks and building societies. On 30 March BoE published the scenario for the stress test which has been agreed by FPC and the PRA Board. Banks’ performance in the stress scenario will be reviewed against two key capital adequacy thresholds: a 4.5% CET1 risk-weighted capital ratio and a 3% Tier 1 leverage ratio. Up to 25% of Tier 1 capital can be met using relevant additional Tier 1 (AT1) instruments. If the exercise reveals inadequate resilience at the level of the system, FPC will consider a variety of actions, depending on the sources of potential risks, including recommendations to PRA and FCA. BoE will publish the results of the 2015 stress test alongside the Financial Stability Report in December. (Source: BoE Publishes Details of 2015 Stress Test for Largest UK Banks and Building Societies)

BoE notes market practice and global principles codes: BoE has noted the publication of the revised "Global Preamble: Codes of best market practice and shared global principles” document. This has been endorsed by the eight committees at the annual global foreign exchange committees meeting, held in Tokyo on 23 March, and updates the original version published in 2013. The eight committees have worked together closely since the 2014 global foreign exchange committee meeting in Sydney to draft the revised document, which features more detailed, globally harmonised, guidance. The document covers topics such as personal conduct, confidentiality and market conduct, and policies for execution practices, and reflects a number of the FSB’s Foreign Exchange Benchmark recommendations. (Source: Global Preamble: Codes of Best Market Practice and Shared Global Principles)