At its meeting on 26 September, the Financial Policy Committee agreed one recommendation, set the UK countercyclical capital buffer (CCB) rate and recognised CCB rates set by the Norwegian and Swedish authorities:
1. The FPC recommends that HM Treasury exercise its statutory power to enable the FPC to direct, if necessary to protect and enhance financial stability, the PRA and FCA to require regulated lenders to place limits on residential mortgage lending, both owner-occupied and buy-to-let, by reference to:
a. Loan-to-Value Ratios;
b. Debt-to-Income Ratios, including Interest Coverage Ratios in respect of buy-to-let lending.
2. The FPC set the countercyclical capital buffer rate for UK exposures at 0%.
3. The FPC also recognised the 1% countercyclical capital buffer rates set recently by the Norwegian and Swedish authorities. These rates should be applied by UK regulated banks, building societies and investment firms with relevant exposures located in these countries in calculating their institution-specific countercyclical capital buffers from 3 October 2015.
Published on
10 October 2014
Financial Policy Committee record