BOE: FPC says risk environment remains challenging, CCyB remains at 2%

The financial system risk environment remains challenging despite an uptick in the central economic outlook, the Bank of England's Financial Policy Committee said Wednesday.

• Publishing the minutes of the March FPC meeting, the bank said global concerns include weak CRE markets in developed markets, fallout from a weaker China property market and, given tighter financial conditions, high public debt levels in advanced economies.
• Asset valuations have risen across a broad range of markets, therefore, the FPC said the risk of a sharp correction in a broad range of asset prices and a widening in credit spreads has grown since Q4 2023.
• However, the FPC judged the UK bank system as resilient and able to support households and businesses, even if economic and financial conditions worsen more than currently expected.
• The FPC maintained the counter-cyclical capital buffer (CCyB) at 2%