This Tuesday, the Bank of England (BoE) released its semi-annual Financial Stability Report, with the following highlights:
FPC forecasts the UK CCYB rate to remain at 0% until at least December 2021.
The bank’s capacity to rebuild capital while continuing to help UK individuals and businesses will determine how quickly it returns to a typical UK CCYB rate of around 2%.
The economic outlook has improved, but there are still risks to the recovery, particularly those related to COVID spread.
Risky asset prices have continued to rise, and asset values in some markets look to be greater than they have been in the past.
In a low-interest rate environment, asset prices may also indicate a hunt for yield and increased risk-taking.
Market-based finance must be more resilient to shocks rather than intensify them.
The Federal Reserve Board expects banks to use all of their capital buffers to help the economy recover.
The rise in risk-taking has resulted in increased volatility in the price of several crypto-assets.
There are hints that institutional investors, banks, and important payment system operators are becoming more interested in crypto-assets and related services.
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