United Kingdom : Financial Sector Assessment Program-Macroprudential Institutional Framework-Technical Note

The recent overhaul of the U.K. financial regulatory structure has placed emphasis on financial stability and built a new institutional framework that appears appropriate for conducting macroprudential policy effectively. The institutional setup is carefully thought out and well designed, providing clear roles and responsibilities, adequate powers and accountability, and promoting strong coordination between the constituent agencies. In particular: The Bank of England (BoE) has been assigned a clear financial stability mandate. The Financial Policy Committee (FPC) lies at the center of the macroprudential framework, tasked with identifying, monitoring and taking action to mitigate systemic risk. The framework provides a number of channels to promote the dialogue and interaction between the FPC and the Treasury, while safeguarding its independence.