The Bank of England‘s Financial Policy Committee (FPC) asserted in its March meeting minutes United Kingdom’s major banks are well able to withstand severe market and economic disruption. In addition, the committee said the household vulnerability is also considerably lower than before the financial crisis.
FPC further stated it will likely hold the 0% countercyclical capital buffer rate for at least 12 months, adding the pace of return to the standard 2% rate would be determined by how much banks’ capital has been depleted through this period.
“Businesses and households should be able to turn to the banking system to meet their need for credit to bridge through this period of economic disruption. The FPC, together with the PRC, will monitor closely the response of banks to these measures as well as the credit conditions faced by UK businesses and households more generally,” the press release read.