Risk Assessment
Risk assessment is an important part of the Bank's work because it can help to identify possible risks to financial stability and hence promote risk mitigation by policy makers and private sector risk managers. All Divisions in the area contribute to the risk assessment activity.
Given the importance of cross-border banking and capital market links for the UK financial system, the Bank conducts wide-ranging economic and financial risk assessment related to financial markets and financial intermediaries worldwide. The information obtained may take a range of forms, from banking sector and financial market data, suitable for econometric analysis, to payment system information and market anecdote.
High-level guidance on risk assessment priorities is provided by the Bank's Financial Stability Board. Important financial stability issues are also discussed with the Treasury and the FSA in the monthly Standing Committee, which was set up under the Memorandum of Understanding. The Bank's assessment of the financial stability conjuncture and outlook is published in the Financial Stability Report. The Bank conducts ongoing work to identify new sources of risks and to develop new types of vulnerability assessments and analytical techniques. This also relates to its work on financial crisis management and international finance.
