The appointment of Sarah Breeden to the Financial Policy Committee Contents
1The appointment of Sarah Breeden
Background on Sarah Breeden
4.Sarah Breeden joined the Bank of England’s Financial Policy Committee on 27 May 2021, on appointment as Bank of England’s Executive Director for Financial Stability Strategy and Risk.
5.Ms Breeden has worked in the Bank of England throughout her career, and joined that bank on leaving university in 1991. She has held a number of senior roles in the Bank of England, including Executive Director, UK Deposit Takers Supervision, Executive Sponsor, Climate Change, Executive Director, International Bank Supervision and Head of Division then Interim Director, Financial Stability Strategy & Risk.
6.In oral evidence, we questioned Sarah Breeden on the work of the FPC. Topics covered during the session included:
- the Government response to the advent of the coronavirus pandemic and how it affected the banking system;
- the FPC’s assessment of whether banks can cope as Government support is withdrawn;
- whether there needs to be more regulation of cloud service providers involvement with banks and financial institutions;
- the way the counter cyclical buffer was used by banks during the onset of the pandemic in 2020;
- the circumstances when banks should use buffers;
- whether the FPC has sufficient powers;
- the Bank’s approach to setting a minimum requirement for own funds and eligible liabilities (MREL) for challenger banks;
- where future financial crises might come from and what is being done by the FPC to protect the banking system;
- how the non-bank financial sector creates risk for the financial system;
- how liquidity of assets in open ended funds can be improved;
- whether regulators have sufficient powers to regulate non-bank financial institutions;
- whether the recent increase in private equity deals is a risk to the financial system;
- what the risks are to financial stability from climate change and whether she thinks there will be a single event that will trigger a climate change driven financial crisis;
- whether the levers that can mitigate risk of climate change are with the Bank of England and FPC or whether this is a Government issue, and whether the Government is doing enough to mitigate risks of climate change and ensure a smooth transition to net zero; and
- the extent to which other environmental risks, such as biodiversity, should be taken into account by the FPC when considering the risks to the financial system.
7.We are satisfied that Sarah Breeden has the appropriate professional competence and personal independence to become a member of the Financial Policy Committee. We wish her every success.