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Directions by Financial Policy Committee |
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9G | Directions to FCA or PRA requiring macro-prudential measures |
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(1) | The Financial Policy Committee may give a direction to the FCA or the |
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PRA (“the regulator”) requiring the regulator to exercise its functions so |
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as to ensure the implementation, by or in relation to a specified class of |
| 5 |
regulated persons, of a macro-prudential measure described in the |
| |
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(2) | “Regulated person” means— |
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(a) | in relation to the FCA— |
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(i) | an authorised person within the meaning of FSMA 2000, |
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(ii) | a recognised investment exchange within the meaning |
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(iii) | an EEA market operator as defined by section 312D of |
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(b) | in relation to the PRA, a PRA-authorised person within the |
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(3) | “Macro-prudential measure” is to be read in accordance with section |
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(4) | The direction may relate to all regulated persons or to regulated |
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persons of a specified description, but may not relate to a specified |
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| |
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(a) | may refer to the opinion of the regulator or require or authorise |
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the exercise of a discretion by the regulator; |
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(b) | may be expressed to remain in force for a specified period or |
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(6) | The direction may not require its provisions to be implemented by |
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specified means or within a specified period, but may include |
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recommendations as to the means to be used and the timing of |
| |
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(7) | A recommendation made under subsection (6) may be expressed to be |
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one to which section 9P(3) (duty to comply or explain) applies. |
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(8) | The direction may not require the regulator to do anything that it has |
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no power to do, but the existence of the direction is relevant to the |
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exercise of any discretion conferred on the regulator. |
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(9) | The direction may specify particular matters to which the regulator is |
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or is not to have regard in complying with the direction, but those |
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matters must be specified in relation to all regulated persons or a class |
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of regulated person rather than a specified regulated person. |
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(10) | The direction may refer to a publication issued by the FCA, the PRA, |
| 40 |
another body in the United Kingdom or an international organisation, |
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as the publication has effect from time to time. |
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9H | Compliance with directions under section 9G |
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(1) | The regulator must comply with a direction given to it under section 9G |
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as soon as reasonably practicable. |
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(2) | An order under section 9K may, in relation to cases where the regulator |
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is complying with a direction under section 9G, exclude or modify any |
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procedural requirement that would otherwise apply under FSMA 2000 |
| |
in relation to the exercise by the regulator of its functions in pursuance |
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(3) | The regulator to which a direction under section 9G is given must give |
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the Financial Policy Committee one or more reports on how it is |
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complying or has complied with the direction. |
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(4) | The Financial Policy Committee may give directions to the regulator |
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specifying the times by which reports required by subsection (3) must |
| 10 |
be given to the Committee. |
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(5) | “Regulator” has the same meaning as in section 9G. |
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9I | Revocation of directions under section 9G |
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(1) | The Financial Policy Committee may at any time by notice to the |
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regulator revoke a direction under section 9G. |
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(2) | A direction under section 9G is to be taken to be revoked if the measure |
| |
to which it relates ceases to be a macro-prudential measure, but this is |
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subject to any provision made under section 9K(4)(e). |
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(3) | The revocation of a direction under section 9G does not affect the |
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validity of anything previously done in accordance with it. |
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(4) | “Regulator” has the same meaning as in section 9G. |
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9J | Further provisions about directions under section 9G |
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(1) | Each of the following must be in writing— |
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(a) | a direction under section 9G; |
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(b) | a notice revoking such a direction; |
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(c) | a report under section 9H(3). |
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(2) | The Financial Policy Committee must give the Treasury a copy of any |
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direction under section 9G or any notice revoking such a direction. |
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(3) | The Treasury may, if they think fit, lay before Parliament a copy of a |
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direction under section 9G or a notice revoking such a direction. |
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(4) | Where a direction under section 9G, or a notice revoking such a |
| |
direction, is included in a record published under section 9R, the |
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Treasury must, if they have not already done so, lay before Parliament |
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a copy of the direction or notice in the form in which it is published in |
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9K | Macro-prudential measures |
| |
(1) | For the purposes of section 9G a “macro-prudential measure” is a |
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measure prescribed by the Treasury by order. |
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(2) | Before making an order under this section, the Treasury must— |
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(a) | consult the Financial Policy Committee, or |
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(b) | if the Treasury considers that the delay involved in consulting |
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the Committee would be prejudicial to the stability of the UK |
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financial system, consult the Governor of the Bank. |
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(3) | In prescribing a measure, the order must specify whether the measure |
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is prescribed in relation to the FCA, the PRA, or both. |
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(4) | An order under this section— |
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(a) | may make different provision for different cases; |
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(b) | may confer a discretion on the Financial Policy Committee, the |
| 5 |
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(c) | may refer to rules made by the FCA or the PRA; |
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(d) | may refer to a publication issued by the FCA, the PRA, another |
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body in the United Kingdom or an international organisation, |
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as the publication has effect from time to time; |
| 10 |
(e) | may contain transitional provisions and savings relating to the |
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coming into force of any provision of the order or to the ceasing |
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to be in force of any temporary provision made by the order. |
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9L | Statements of policy by Financial Policy Committee |
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(1) | In relation to each macro-prudential measure prescribed under section |
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9K, the Financial Policy Committee must prepare and maintain a |
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written statement of the general policy that it proposes to follow in |
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relation to the exercise of its power of direction under section 9G so far |
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as it relates to that measure. |
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(2) | The Committee may at any time alter or replace a statement maintained |
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(3) | The Bank must publish each statement maintained under this section. |
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(4) | Publication is to be in such manner as the Bank thinks fit. |
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(5) | Nothing in this section is to be regarded as preventing the Financial |
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Policy Committee from exercising its power of direction under section |
| 25 |
9G in relation to a macro-prudential measure, where it considers it |
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necessary to do so by reason of urgency, before it has prepared a |
| |
statement under this section in relation to that measure. |
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9M | Parliamentary control of orders under section 9K |
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(1) | Except as provided by subsection (2), an order under section 9K is not |
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to be made unless a draft of the order has been laid before and |
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approved by resolution of each House of Parliament. |
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(2) | An order under section 9K may be made without a draft having been |
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laid and approved as mentioned in subsection (1) if the order contains |
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a statement that the Treasury are of the opinion that, by reason of |
| 35 |
urgency, it is necessary to make the order without a draft being so laid |
| |
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(3) | An order under section 9K made in accordance with subsection (2)— |
| |
(a) | must be laid before Parliament after being made, and |
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(b) | ceases to have effect at the end of the relevant period unless |
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before the end of that period the order is approved by a |
| |
resolution of each House of Parliament (but without affecting |
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anything done under the order or the power to make a new |
| |
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(4) | The “relevant period” is a period of 28 days beginning with the day on |
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(5) | In reckoning the relevant period no account is to be taken of any time |
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during which Parliament is dissolved or prorogued or during which |
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either House is adjourned for more than 4 days. |
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Recommendations by Financial Policy Committee |
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9N | Making of recommendations within the Bank |
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(1) | The Financial Policy Committee may make recommendations within |
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(2) | The recommendations may, in particular, relate to— |
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(a) | the provision by the Bank of financial assistance to financial |
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(b) | the exercise by the Bank of its functions in relation to payment |
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systems, settlement systems and clearing houses. |
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(3) | The Committee may not make recommendations about— |
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(a) | the provision by the Bank of financial assistance in relation to a |
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particular financial institution, or |
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(b) | the exercise by the Bank of its powers under Parts 1 to 3 of the |
| |
Banking Act 2009 in relation to a particular institution. |
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(4) | The recommendations must be made or confirmed in writing. |
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9O | Recommendations to Treasury |
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(1) | The Financial Policy Committee may make recommendations to the |
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(2) | The recommendations may, in particular, relate to the exercise by the |
| |
Treasury of their power to make orders under— |
| |
(a) | section 9K (macro-prudential measures), |
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(b) | section 22(1) or (1A) of FSMA 2000 (regulated activities), |
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(c) | section 22A(1) of that Act (designation of activities requiring |
| |
prudential regulation by PRA), |
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(d) | section 137C(1)(b) of that Act (purposes for which FCA may |
| |
make product intervention rules), or |
| |
(e) | section 165A(2)(d) of that Act (additional persons who may be |
| 30 |
required by PRA to provide information). |
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(3) | The recommendations must be made or confirmed in writing. |
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(4) | The Committee may make a recommendation under subsection (2)(e) |
| |
only if it considers that the exercise by the Treasury of their power to |
| |
make an order under section 165A(2)(d) of FSMA 2000 in the manner |
| 35 |
proposed is desirable for the purposes of the exercise by the Committee |
| |
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(5) | Before giving a recommendation under subsection (2)(e), the |
| |
Committee must consult the Treasury. |
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9P | Recommendations to FCA and PRA |
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(1) | The Financial Policy Committee may make recommendations to the |
| |
FCA and the PRA about the exercise of their respective functions. |
| |
|
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|
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|
(2) | The recommendations may relate to all regulated persons or to |
| |
regulated persons of a specified description, but may not relate to the |
| |
exercise of the functions of the FCA or the PRA in relation to a specified |
| |
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(3) | If the recommendations are expressed to be recommendations to which |
| 5 |
this subsection applies, the body to which they are made must as soon |
| |
as reasonably practicable— |
| |
(a) | act in accordance with the recommendations, or |
| |
(b) | if to any extent it does not, notify the Committee of the extent to |
| |
which it has not acted in accordance with the recommendations |
| 10 |
and of the reasons for its decision. |
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(4) | The recommendations, and any notification under subsection (3)(b), |
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must be made or confirmed in writing. |
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(5) | “Regulated person” has the same meaning as in section 9G. |
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9Q | Recommendations to other persons |
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(1) | The Financial Policy Committee may make recommendations to |
| |
persons other than those mentioned in sections 9N to 9P. |
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(2) | The recommendations must be made or confirmed in writing. |
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Publication of record of meetings |
| |
9R | Publication of record of meetings |
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(1) | The Bank must publish a record of each meeting of the Financial Policy |
| |
Committee before the end of the period of 6 weeks beginning with the |
| |
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(2) | The record must specify any decisions taken at the meeting (including |
| |
decisions to take no action) and must set out, in relation to each |
| 25 |
decision, a summary of the Committee’s deliberations. |
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(3) | The decisions referred to in subsection (2) include in particular a |
| |
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(a) | to give or revoke a direction under section 9G; |
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(b) | to make recommendations under any of sections 9N to 9Q. |
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(4) | Where a decision has been made to give or revoke a direction under |
| |
section 9G, the record must include the text of the direction or of the |
| |
| |
(5) | Where a decision has been made to make recommendations under any |
| |
of sections 9N to 9Q, the record must include the recommendations. |
| 35 |
(6) | Where since the previous meeting the Committee has received a |
| |
notification under section 9P(3)(b), the record must include the |
| |
| |
(7) | The information required by subsections (1) and (2) does not include |
| |
information identifying particular members of the Committee. |
| 40 |
(8) | Subsections (1) to (6) do not require the publication of— |
| |
(a) | information about any recommendations made under 9N(2)(a); |
| |
|
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|
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|
(b) | information whose publication within the time required by |
| |
subsection (1) would in the opinion of the Committee be against |
| |
| |
(c) | information about any decision under paragraph (b); |
| |
(d) | information about a decision to give a direction under section |
| 5 |
9G which has been revoked before the record of the meeting at |
| |
which it was given is published; |
| |
(e) | information about the decision to revoke a direction where |
| |
information about the direction is withheld under paragraph |
| |
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(9) | Publication under this section or section 9S is to be in such manner as |
| |
| |
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(1) | Where the Financial Policy Committee decides under subsection (8)(b) |
| |
of section 9R that publication of information within the time required |
| 15 |
by subsection (1) of that section would be against the public interest— |
| |
(a) | it must consider whether to fix a date as the earliest date on |
| |
which the information may be published, and |
| |
(b) | if it does not fix a date, it must keep under consideration the |
| |
question whether publication of the information would still be |
| 20 |
against the public interest. |
| |
(2) | The Committee must from time to time determine the procedures that |
| |
it will follow in complying with the duty in subsection (1)(b). |
| |
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(a) | fixes a date under subsection (1)(a) as the earliest date on which |
| 25 |
any information may be published, or |
| |
(b) | decides under subsection (1)(b) that publication of any |
| |
information is no longer against the public interest, |
| |
the Bank must publish the information at the time when it next |
| |
publishes under section 9R(1) the record of a meeting of the Committee. |
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Financial stability reports by Financial Policy Committee |
| |
9T | Financial stability reports by Financial Policy Committee |
| |
(1) | The Financial Policy Committee must prepare and publish reports |
| |
relating to financial stability (“financial stability reports”). |
| |
(2) | Two financial stability reports must be published in each calendar year. |
| 35 |
(3) | A financial stability report must include— |
| |
(a) | the Committee’s view of the stability of the UK financial system |
| |
at the time when the report is prepared, |
| |
(b) | an assessment of the developments that have influenced the |
| |
| 40 |
(c) | an assessment of the strengths and weaknesses of the UK |
| |
| |
(d) | an assessment of risks to the stability of the UK financial system, |
| |
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|
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|
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(e) | the Committee’s view of the outlook for the stability of the UK |
| |
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(4) | A financial stability report must also include— |
| |
(a) | a summary of the activities of the Committee in the reporting |
| |
| 5 |
(b) | an assessment of the extent to which the exercise by the |
| |
Committee of its functions (both during the reporting period |
| |
and previously) has succeeded during the reporting period in |
| |
achieving the Committee’s objectives. |
| |
(5) | The reporting period is the period since the date of the previous |
| 10 |
financial stability report, except that in the case of the first financial |
| |
stability report it is the period since the time when this section came |
| |
| |
(6) | Nothing in subsection (3) or (4) is to be regarded as requiring the |
| |
Committee to include in a financial stability report any information |
| 15 |
whose publication would in the Committee’s opinion be against the |
| |
| |
(7) | The Committee must give a copy of each financial stability report to the |
| |
| |
(8) | The Treasury must lay before Parliament a copy of each financial |
| 20 |
| |
(9) | Publication of a financial stability report is to be in such manner as the |
| |
| |
Meetings between Governor and Chancellor of the Exchequer |
| |
9U | Meetings between Governor and Chancellor of the Exchequer |
| 25 |
(1) | As soon as reasonably practicable after the publication by the Financial |
| |
Policy Committee of a financial stability report, the Governor of the |
| |
Bank and the Chancellor of the Exchequer must meet to discuss the |
| |
report and any other matters relating to the stability of the UK financial |
| |
system that they consider it appropriate to discuss. |
| 30 |
(2) | The Treasury must publish a record of each meeting required by |
| |
subsection (1) before the end of the period of 6 weeks beginning with |
| |
| |
(3) | Publication under subsection (2) is to be in such manner as the Treasury |
| |
| 35 |
(4) | Subsection (2) does not require the publication of information whose |
| |
publication within the time required by that subsection would in the |
| |
opinion of the Treasury be against the public interest. |
| |
(5) | Before publishing the record of a meeting required by subsection (1), or |
| |
deciding under subsection (4) not to publish such a record, the |
| 40 |
Treasury must consult the Bank about the record and its publication. |
| |
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