Andrew Bailey has written to Jeremy Hunt, with the Financial Policy Committee’s response to HM Treasury’s ‘Remit and Recommendations for the Financial Policy Committee’.
The letter welcomes the recommendations and details the Committee’s key considerations of:
- Prudential risks associated with the banking system;
- Prudential risks associated with the non-bank financial system, including markets and infrastructure;
- Non-financial risks, such as conduct risks, cyber security and climate change; and
- Risks from growth of private sector debt that could make the system less resilient and economic growth more fragile.
Mr Bailey sets out the backdrop to the current and intensifying financial pressures on the UK, and notes the risks and vulnerabilities currently in the financial system. The Committee’s recommendations relate to: the interaction between the Committee’s objectives; and supporting the Government’s economic policy towards the financial services industry; facilitating finance for productive investment. The Committee also makes recommendations to the Treasury on legislative changes, on enhancing its own accountability, and on engaging with financial sector participants. The letter also states the Committee’s intention to have regard to the interaction between monetary policy and macroprudential policy.