Bank of England Governor Mark Carney led an emergency meeting of the central bank’s Financial Policy Committee at the end of last month as the crisis in Greece escalated.
While the FPC held its quarterly meeting on June 24, the breakdown in talks on Greece’s bailout terms forced the panel to hold a briefing a week later. The additional meeting was revealed on Wednesday in the record of the committee’s latest gathering.
As events in Greece unfolded late last month, the FPC changed its analysis of financial-stability risks to the U.K. While Carney said this month that risks had been broadly unchanged since December, the escalation of tensions in Greece had changed the outlook.
In an annex to the record, the FPC said it discussed the euro area and that policy makers were alert to contagion to the U.K. from a potential Greek exit from the currency bloc. The comments echo those made in the Financial Stability Report on July 1, when Carney said risks related to Greece were “particularly acute.”
The FPC record also showed that the BOE will review of Britain’s buy-to-let housing market to identify potential risks to financial stability and determine what regulatory tools may be needed to mitigate these risks.
“As with the work carried out last year for the owner-occupied market, this assessment would need to investigate both the narrow -- through potential losses on buy-to-let loans -- and broad -- through the wider impact of increased indebtedness on the macroeconomy’s sensitivity to shocks -- links back to financial stability,” the BOE said.
