BOE No-Deal Planning Won't Stop Market Volatility, Cunliffe Says
(Bloomberg) -- The Bank of England's efforts to ensure financial stability in the case of a no-deal Brexit won't prevent market volatility, according to policy maker Jon Cunliffe.
A disorderly Brexit is the biggest risk facing the U.K. financial system, and would likely lead to a correction in British assets and losses for banks, Cunliffe, the BOE's Deputy Governor for Financial Stability, said in a speech in London Wednesday.
While the central bank has taken steps to ensure that “the system is resilient to a worst-case major economic shock from Brexit, that does not mean losses would be avoided, or that it would be without volatility,” Cunliffe said.
“Financial stability does not mean market stability,” he added.
Cunliffe was speaking the day after the BOE announced it was putting in place more buffers for the banking system as the prospect of a messy Brexit continues to hit companies and consumers. The U.K. is currently due to leave the European Union -- with or without an exit deal -- at the end of this month.
He also noted that the overall level of U.K. debt is high by historical standards, but the buildup hasn't been very rapid. The Financial Policy Committee has already responded to some signs of increased risk appetite among banks, and the growth rate of consumer lending has subsequently fallen.
--With assistance from Lucy Meakin.
To contact the reporter on this story: David Goodman in London at dgoodman28@bloomberg.net
To contact the editors responsible for this story: Fergal O'Brien at fobrien@bloomberg.net, Brian Swint, Andrew Atkinson
©2019 Bloomberg L.P.
-
Talking Points This Week: Tech Nerves, FII Buying, And A Faraway Banking Shock
The global markets are not shining this Diwali. The exception in the large markets is, India.
-
Midterm Rally Lasted A Day. The Hard Reality Of A Divided US May Last Two Years | Opinion
Between a contested AI boom, a debt ceiling that arrives in 2027 and a president with every incentive to act alone, the next two years may prove more volatile than the first day's rally suggests.
-
Blue Wave Will Derail the AI Trade but Won't Dismantle the AI Era | Unhedged Position
The Democrats' sweep of the US Congress will see politics collide with economic forces both over the long and short term.
-
It's Time To Take The GST Council's Bet On Trust Global
Payment records can prove India's services exports, and clear, proportionate rules can bring foreign digital sellers into the tax net.
-
Opinion | India at 38: From Innovation Overperformer to Innovation Powerhouse
India now has 453 VC-backed deep science startups, 18 of them late-stage, after 117 percent growth since 2020. Laurus Labs, at USD 9.3 billion, is the most valuable deep science company in any middle-income economy outside China.
-
Navigating Energy Crossroads: S Jaishankar's Call For Diversified Supply Chains At G20 Ministerial Meeting
As geopolitical fault lines continue to test maritime trade routes and commodity flows, Jaishankar's message remains pertinent: true economic resilience requires open markets, protected transit lines, and a genuine commitment to multilateral cooperation rather than coercion.
-
Indians Are Travelling, But Not Every Journey Is A Holiday | The Week In Whys
Pilgrims, patients and working women are the real travellers, and the system hasn't quite caught up with them.
-
Getting To Work Costs Women More | The Reason Why
It is not just about women paying more than men. It is about women paying much more in cities than in villages.
-
AI Bias In Investing Cannot Be Eliminated, But It Can Be Governed
Framing is a particularly important example as identical financial information presented in terms of gains rather than losses can lead an LLM to reach a different assessment.
