What a difference half a year makes

05 Jul 2016

It was only around six months ago that the Bank of England in this Financial Stability Report talked of the UK emerging from the financial crisis. Stability was the theme of the report, with the Bank focusing on preventing external economic shocks knocking the UK recovery off course. Fast forward to today and the tone of the Bank’s July 2016 Financial Stability Report could not be more different. Now the talk is of “challenging” economic conditions of the home-ground variety. Far from suggesting UK banks increase their capital buffers (something done in good times) banks can now reduce them (a sign of problems ahead). It’s a bit like consumers being told to save more when times are good and spend more when times are bad. By cutting the capital buffers of banks, the Bank of England hopes to release £150 billion of lending to the wider economy

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IRN Team