The June 2013 “Financial Stability Report” of the Financial Policy Committee (FPC) and the FPC’s response to the Chancellor’s “Remit and Recommendations for the Financial Policy Committee” have today been laid before Parliament.
The “Financial Stability Report” includes the committee’s view of the current stability of the UK financial system, its assessment of the outlook for stability, a summary of the activities of the committee over the previous five months, and any new policy decisions by the committee by way of recommendations and directions.
The report forms a key part of the accountability mechanism for the FPC under the Bank of England Act 1998 as amended by the Financial Services Act 2012.
On 30 April 2013, the Chancellor wrote to the Governor of the Bank of England, as chair of the FPC, to specify the Government’s economic policy and to make recommendations to the committee concerning its objectives and functions.
The FPC is required to respond to the Treasury setting out any action it has taken or intends to take in accordance with the Treasury’s recommendations and, if it does not intend to act in accordance with a recommendation, why not.