Capital Markets - News and analysis

Bank of England: Executive Summary of Financial Stability Report, Oct. 2008

"These exceptional interventions by governments and central banks should help to stabilise the banking system in the period ahead. While there are still risks in the wider financial system, the immediate response to the measures has been positive. Over time, against the backdrop of an economic downturn, banks will need to adjust their balance sheets and funding models, weaning themselves off current high levels of official sector support. Lending growth is likely to remain slower than in recent years. Looking further ahead, recent events have highlighted the need for a fundamental rethink internationally of appropriate safeguards against systemic risk, including through the development of macroprudential policies to dampen the financial cycle."

Source: Extract from Executive Summary