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By Huw Jones
"Nonetheless, material risks remain, particularly in areaswhere actions would be needed by both the
Financial industry officials say the EU may not act untilthe last minute in order to put maximum pressure on banks andinsurers based in
Without action, insurers in
There is particular concern over uncleared derivativescontracts worth a notional 26 trillion pounds, which need atemporary permissions regime to service them.
"EU authorities have not announced their intention to grantsuch permissions," the FPC said.
Robert Ophele, chair of
But ratification of that agreement is not expected untilOctober or later, though a transition deal this month couldallow regulators to begin talks.
The European Commision has been approached by Reuters forcomment on the matter.
JUNE CAPITAL REVIEW
The FPC said
It sent a warning to banks, however.
The committee will review in June whether the current 1percent counter-cyclical capital buffer should be raised due toother risks, such as more home loans are being granted at highloan-to-income ratios that bump up against the BoE's ceiling.
The FPC decided that this year's stress test for the mainbanks and building societies should be the same as for 2017,which was more severe than the 2007-09 global financial crisis.
The test will take into account preparations for Brexit andthe introduction of ring-fencing of retail banking arms withbespoke cushions of capital in January 2019.
This year's test will also reflect a new accounting rulethat forces banks to provision earlier for souring loans.
Systemic banks, such as HSBC and Barclays will face a highertest hurdle than last year, somewhere above 8 percent ofrisk-weighted asset, compared with just below that level in2017. Missing the hurdle will mean aggressive, rapid actionwould be needed to bolster capital buffers.(Reporting by Huw Jones; Editing by Toby Chopra)
