“The interim Financial Policy Committee (FPC) is today publishing a draft Policy Statement explaining the planned powers for the FPC to give directions setting extra capital requirements for the purposes of financial stability. The statutory FPC will be required to publish such a Policy Statement. A draft is being published today to assist Parliament’s scrutiny of forthcoming draft secondary legislation. The government is planning two such powers: the countercyclical capital buffer (CCB) and sectoral capital requirements (SCRs). The CCB supplements headline capital requirements. The SCR supplements capital requirements on exposures to specific sectors judged to pose a risk to the system as a whole. The draft Policy Statement relates to these powers of direction. It describes the circumstances in which the FPC might use the powers, taking account of their likely impact on the resilience of the financial sector and growth. It also describes some of the indicators the FPC will routinely review to help inform its decisions.”
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