BoE has published:
- a summary of the latest meeting of the Financial Policy Committee, which looked at how the UK financial system has performed during the pandemic. It notes how the system has met the initial surge in demand for credit with the help of the government-backed schemes; and that UK households were in a stronger position at the start of the pandemic than they were at the start of the financial crisis and have now also benefited from government support – but is is important for lenders to work flexibly with borrowers as they resume repayments. The report also notes that corporate insolvencies are likely to increase, which will cause banks to incur losses on their loan books. However, it hopes banks will have sufficient buffers to deal with this. The FPC has carried out a reverse stress test, the result of which it says allowed it to judge that banks will be resilient to a wide range of outcomes such that it would be costly to take defensive action at this point. The report also assesses the effects on markets, the LIBOR transition, payments and EU withdrawal; and
- the Financial Stability Report for August 2020 and the quarterly Monetary Stability Report, which explain the need to continue to take measures to protect households and businesses against the effects of Covid-19.