Bank Of England: Record Of The FPC Meetings Held On 28 June And 1 July 2016

At its meeting on 1 July, following its discussion on 28 June, the Financial Policy Committee:

Reduced the UK countercyclical capital buffer rate from 0.5% to 0% of banks’ UK exposures with immediate effect.
Recommended to the Prudential Regulation Authority (PRA) that, where existing PRA supervisory buffers of PRA-regulated firms reflect risks that would be captured by a UK countercyclical capital buffer rate, it reduce those buffers, as far as possible and as soon as practicable, by an amount of capital which is equivalent to the effect of a UK countercyclical capital buffer rate of 0.5%.
Welcomed the Bank of England’s announcement that it will continue to offer indexed long-term repo operations on a weekly basis until end-September 2016. This is a precautionary step to provide additional flexibility in the Bank’s provision of liquidity insurance, further reinforcing the ability of firms to draw on their own liquidity buffers.
Supported the position of the PRA to allow insurance companies to use flexibility in Solvency II regulations to recalculate transitional measures. These measures smooth the impact of those new regulations.