Summary
Since the UK referendum on membership of the European Union, UK financial stability has been maintained through a challenging period of uncertainty around the domestic and global economic outlook. Substantial moves in financial market prices have not been amplified by the UK financial system.
The outlook for UK financial stability remains challenging. The UK economy has entered a period of adjustment following the EU referendum. The likelihood that some UK-specific risks to financial stability could materialise remains elevated.
Vulnerabilities stemming from the global environment and financial markets, which were already elevated, have increased further since July.
Financial stability depends on the resilience of the system to risks. The UK banking system is capitalised to sustain the provision of financial services, including the supply of credit, to severe stresses such as those that could face the United Kingdom and global economies.
The FPC remains focused on the ability of the UK banking system to maintain this resilience in future.
Recent market developments further highlight the importance of the resilience of markets, and of market-based finance, to sharp market moves. The resilience of market liquidity remains uneven.
The FPC remains committed to robust prudential standards in the UK financial system.