Debts: China
(asked on 13th June 2016) - View Source
Question to the HM Treasury:
To ask Mr Chancellor of the Exchequer, what recent assessment he has made of the potential effect on the UK economy of the increase in corporate debt in China.
This question was answered on 20th June 2016
The Treasury continuously monitors global economic developments, including in China, and their impact on the UK as part of the normal process of policy development. As one of the most open trading economies in the world with a large financial sector, we have to recognise that the UK is not immune to the continued problems being experienced in the world economy. Nonetheless, the Bank of England’s 2015 stress tests modelled a severe slowdown in commodities and emerging markets. No banks were required to submit revised capital plans following the stress tests. These results indicate that the UK banking system would have the capacity to continue to lend to the real economy, even under such a severe adverse scenario.
The Treasury continuously monitors global economic developments, including in China, and their impact on the UK as part of the normal process of policy development. As one of the most open trading economies in the world with a large financial sector, we have to recognise that the UK is not immune to the continued problems being experienced in the world economy. Nonetheless, the Bank of England’s 2015 stress tests modelled a severe slowdown in commodities and emerging markets. No banks were required to submit revised capital plans following the stress tests. These results indicate that the UK banking system would have the capacity to continue to lend to the real economy, even under such a severe adverse scenario.