The UK's countercyclical capital buffer against downturns was lauded last week by US Federal Reserve Vice Chairman Randal Quarles and former Fed Vice Chairman Donald Kohn.
The US hasn’t used this tool. Kohn, a member of the Bank of England’s financial policy committee, said the UK set its CCyB at 1 percent of a bank’s risk-weighted assets after considering stress test results.
“Importantly, unlike in the US, we feed the stress test results into our consideration of the CCyB, which we have adjusted more actively than our US colleagues,” he said at a London conference.
UK capital buffer touted by current, former US Fed vice chairmen
14 September 2019 8:37am