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Tuesday, October 28, 2008

Bank of England Financial Instability Report?

The Bank of England is today publishing its bi-annual Financial Stability Report. The Report analyses the developments that have culminated in the turmoil of recent weeks and the actions taken by the UK authorities and other countries. It sets out the Bank's views on the near-term prospects for the financial system and the reforms necessary to address systemic risks.
Bank of England|Publications|News|2008|Rebuilding Confidence in the Financial System, 28 October 2008

The Bank of England published its bi-annual Financial Stability report today. It is useful reading for anyone wanting an account of what happened recently to the financial system and the issues and risks that the Bank sees outstanding.

In particular, it is worth noting the Bank's call for counter-cyclical controls on financial institutions. From a political point of view, it is important to ensure we are through the current crisis first, as Martin Wolf points out in the FT. However, while the will is there, new mechanisms do need to be found to prevent or at least mitigate a repeat of the crisis.

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