Bank of England warns of risks from global trade barriers impacting financial market volatility

From Investing.com: 2024-11-29 05:57:05

The Bank of England warns that higher trade barriers could impact global growth and increase uncertainty about inflation, potentially causing financial market volatility. The financial system could also be affected by disruptions to cross-border capital flows and reduced risk diversification. Risks to the UK economy include high public debt levels worldwide.

The BoE states that valuations and risk premia in financial markets are at risk of a sharp correction due to growth, inflation, and interest rate uncertainties. The resilience of UK banks is high, with good capitalisation and liquidity levels. Stress tests will be conducted every two years starting in 2025 to focus on other financial risks.

The BoE will conduct less detailed stress tests as needed in between the full tests. The countercyclical capital buffer remains at 2%, providing banks with ‘rainy day’ capital in times of stress. The central bank aims to reduce administrative strain on lenders while maintaining financial stability.



Read more at Investing.com: Bank of England warns of risks from rise in global trade barriers By Reuters