MNI BRIEF: BOE Bailey Doesn't See Omicron As Big Market Stress

Bank of England Governor Andrew Bailey said that while markets had reacted sharply to the initial news on the Omicron Covid variant he did not expect it to turn into a major stress for them further ahead. Bailey, speaking at the Bank of England's Financial Stability Report press conference, was fairly sanguine in his remarks on Omicron.

"We monitor it very closely and there is a lot of news still to come on Omicron in terms of what its medical symptoms are going to be and on vaccine efficacy ... but I wouldn't say at the moment I think it is going to be a big stress event," Bailey said.

He noted that the BOE's bank stress tests showed banks were able to withstand loan impairments of GBP70 billion, around 3.5 times this year's level, if they are hit by a shock and that the overall UK corporate debt levels was "more moderate than we expected it to be" in response to the Covid shock.