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Cunliffe on crypto and housing

  • Asked on crypto assets: Some of these assets have nothing underlying the asset. Draw a distrinction between that and some of the proposals for financial assets that are linked to something e.g. stablecoins. Basel committee has drawn a distinction between those with nothing underlying and those which are backed by something. At the moment are genearlly seeing this in retail markets, but the amounts are large. Although not at the size that would create financial stability risks. Not strongly linked into financial system. Were those links to start to form, would need to monitor.
  • Cunliffe asked on housing: When you have a high level of household debt, the economy is more vulnerable to stress. Have seen that in companies with highly indebted companies more stressed during Covid. Some of the house price rises are being driven by stamp duty policy, some due to accumulated savings, some due to people's changes of preferences for different houses. Some evidence of this change in preferences being structural and possibly being persistent, but not clear how much yet. FPC does have measures in place to constrain fast moving house price markets since 2014. If we are in the position of a housing boom, those measures are there to constain this. "It's something we keep a very close eye on."

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