BOE Says Brexit Preparedness Has Improved, Some Risks Remain

The transcript discusses the increased likelihood of a no-deal Brexit and the associated risks to UK financial stability. While many risks have been mitigated, some disruptions to cross-border financial services remain possible, primarily affecting the EU. The UK financial system is deemed resilient, with major banks maintaining strong capital levels and liquidity. However, market stability is not guaranteed, and asset prices may adjust sharply in a disorderly Brexit. The FPC is prepared to cut the countercyclical capital buffer to support lending if economic stress materializes.

What has increased since the end of last year regarding Brexit?

• The support from EU authorities

• The stability of the UK economy

• The certainty of a deal Brexit

• The likelihood of a no-deal Brexit

Which group is primarily affected by disruptions to cross-border financial services in a no-deal Brexit?

• EU households and businesses

• Asian markets

• US investors

• UK households

What is the tier one capital level maintained by major UK banks since the stress test?

• 10% of risk-weighted assets

• 5% of risk-weighted assets

• 17% of risk-weighted assets

• 25% of risk-weighted assets

How much high-quality liquid assets have major UK banks built?

• £2 trillion

• £1 trillion

• £500 billion

• £750 billion

What action is the FPC prepared to take in case of major economic stress?

• Sell government bonds

• Halt all lending activities

• Cut the countercyclical capital buffer

• Increase interest rates