Question to the HM Treasury:

To ask the Chancellor of the Exchequer, what steps his Department is taking to (a) identify and (b) take action on systemic risks to the UK (a) financial system and (b) wider economy.

The Treasury actively monitors the financial sector and any risks to the UK’s financial stability and the economy more widely. It works closely with the financial regulators, including the Bank of England and the Financial Conduct Authority, as well as relevant government departments.

The Bank of England’s Financial Policy Committee is responsible for identifying, monitoring and taking action to remove or reduce systemic risks to the UK financial system. HM Treasury participates in FPC discussions through its non-voting membership of the Committee.

An important feature of the UK regulatory system is that independent financial regulators are empowered to work to address risks and challenges to UK financial stability using their technical expertise. The Treasury’s role in relation to this is to set, maintain, and legislate for the overall regulatory architecture in a way that allows the regulators to consider and address systemic risks.

The Treasury, as the UK’s economics and finance ministry, has established processes to monitor risks to the wider economy. The Government stands ready to respond to emerging risks as necessary.