Mansion House: HM Treasury Publishes Remit and Recommendations Letter for Financial Policy Committee

HM Treasury has published a letter from Rachel Reeves, Chancellor of the Exchequer, to Andrew Bailey, Governor of the Bank of England, setting out the remit and recommendations for the Financial Policy Committee for 2024/25.

In the letter, Ms. Reeves states that: (i) the FPC should continue to prioritize its work to address systemic vulnerabilities in market-based finance and ensure that the BoE continues to cooperate with relevant authorities and across jurisdictions to increase resilience in a way that is consistent with supporting sustainable economic growth; (ii) the FPC should continue to focus on cyber and operational risks, noting the evolving threat landscape, including how this might increase these risks, and other potential impacts for financial stability; and (iii) the FPC should assess and identify areas where there is potential to increase the ability of the financial system to contribute to sustainable economic growth without undermining financial stability.

The letter sets out: (a) the matters that the FPC should regard as relevant to the BoE's financial stability objective, and the responsibility of the FPC in relation to the achievement of that objective; (b) the responsibility of the FPC in relation to support for the U.K. government's economic policy; and (c) matters to which the FPC should have regard in exercising its functions. The FPC must respond to the government, describing any action it has taken or intends to take in response to a specific recommendation.

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