The interim Financial Policy Committee’s recommendations for macro-prudential direction powers
23 March 2012
The Government is currently legislating to reform the UK’s financial services regulation. The Financial Policy Committee (FPC) is an essential part of the Government’s reforms to financial regulation, which will ensure that in future there will be a strong and knowledgeable body with an expert view of the stability of the financial system as a whole.
In advance of this legislation, the interim Financial Policy Committee was created on 17 February 2011 as a committee of the court of the Bank of England. The interim FPC will undertake, as far as possible before formal legal powers are created, the permanent body’s macro-prudential role, in addition to vital preparatory work and analysis into potential macro-prudential tools.
HMT asked the interim Financial Policy Committee to undertake analysis of potential macro-prudential tools and recommend tools that it would like the statutory Committee to have a direction power over the regulators to implement. The interim FPC announced its recommendations this morning.
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