A stable financial system is a key ingredient for a healthy and successful economy. People need to have confidence that the system is safe and stable, and functions properly to provide critical services to the wider economy. It is important that problems in particular areas do not lead to disruption across the financial system.
The Bank has a statutory objective to “contribute to protecting and enhancing the stability of the financial systems of the United Kingdom”. The Bank does this through its risk assessment and risk reduction work, market intelligence functions, payments systems oversight, banking and market operations, including, in exceptional circumstances by acting as lender of last resort, and resolution work to deal with distressed banks.
In 2010 the Government outlined plans for reform of the UK regulatory framework, including the creation of an independent Financial Policy Committee at the Bank of England and a new prudential regulator as a subsidiary of the Bank.
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