The Bank of England lowered its capital buffer requirements of the U.K. banks to ensure stability in the financial system after Brexit.
The Financial Policy Committee trimmed the countercyclical capital buffer rate to zero percent from 0.5 percent of banks’ exposure with immediate effect.
The FPC expects to maintain this zero percent countercyclical capital buffer rate until at least June 2017. It will reduce regulatory capital buffers by GBP 5.7 billion.
Further, the FPC judged that risks associated with domestic credit were no longer subdued. A number of economic and financial risks are materializing.
The FPC strongly expects the bank to continue to support the real economy, by drawing on buffers as necessary.
The bank pledged to take more actions that will ensure that capital and liquidity buffers can be drawn on as necessary to support the supply of credit and market functioning.
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