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Home > Financial Stability > Financial Policy Committee > FPC Policy Statement and Core Indicators
 

FPC Policy Statement and Core Indicators

The Financial Policy Committee published a Policy Statement in January 2014 explaining the powers for the FPC to give directions setting extra capital requirements for the purposes of financial stability.   This replaces a draft Statement issued by the interim FPC in January 2013.  There is a statutory requirement for the FPC to prepare and maintain a general statement of policy for the powers of direction it is given under legislation.
 
The FPC has Direction powers over sectoral capital requirements (SCRs) which the FPC can set in relation to exposures to specific sectors judged to pose a risk to the financial system as a whole.  The government has also proposed to make the FPC responsible for the Basel III countercyclical capital buffer (CCB), introduced in the EU under the Capital Requirements Directive and Regulation (CRD IV/CRR).  The Policy Statement describes these tools, the likely impact of using them on financial stability and growth, and the circumstances in which the FPC might expect to use each tool. It also describes the core indicators the FPC will routinely review to help inform its judgement.
 
FPC Core Indicators

Indicators will be useful for shaping the views of the FPC and helping it to explain its decisions publicly. No single set of indicators can ever provide a perfect guide to systemic risks, or the appropriate policy responses, and judgement will play a material role in all FPC decisions. But the Committee will routinely review the set of indicators below, which have proved helpful in identifying emerging risks to financial stability in the past. The FPC will regularly update these indicators, to help explain its decisions and to enhance the predictability of the regime.
 
Please see the links below for the latest version of the FPC’s Policy Statement, and the ‘Related links’ section on the right for historic versions of the Policy Statement.

Key Resources

The FPC's powers to Supplement Capital Requirements (828KB)

CCB core indicators (663KB)
Updated on 27 March 2014

SCR core indicators (301KB)
Updated on 27 March 2014