The Bank of England’s new financial risk watchdog has said it will be able to support economic growth alongside its primary aim of ensuring financial stability.
From next year, the Bank of England is set to take over most British financial regulations; with the support of their watchdogs; and the FPC’s main role is to stop credit booms getting out of control and to monitor risks that cut across individual banks and threaten the financial system as a whole.
Last month, the Chancellor George Osborne announced that he wanted the Financial Policy Committee (FPC) to support government economic policies in the same way its Monetary Policy Committee does.
Although there had been some uncertainty about whether the FPC’s members thought having to take growth into account would distract from their main role; a record of their June 22 meeting showed that the policymakers did not see that there would be a major conflict.
The record is reported to say: “It was noted that the primary objective to protect and enhance resilience and the new secondary objective were compatible.
“Indeed, the committee’s recommendations… over the past year had been specifically designed to build resilience while supporting lending and growth.”