UK: FPC cut the countercyclical capital buffer (CCyB) rate from 0.50% to 0.00% - TDS

Research Team at TDS, notes that as expected, the UK FPC cut the countercyclical capital buffer (CCyB) rate from 0.50% to 0.00% until "at least June 2017", allowing banks to increase their lending capacity by about £150bn.

Key Quotes

“Alongside this decision, the FPC (and PRA) also provided leniency to insurers to recalculate transitional measures related to Solvency II, which is likely to reduce immediate pressure on insurance companies to sell corporate securities and other risky assets. Ultimately these measures should help grease the wheels of the financial system, and ensure that any monetary policy announced at the MPC's upcoming meetings be able to fully work its way through the economy.”