HM Treasury Consults on Macro-Prudential [Systemic Risk] Powers

As part of its work on the reform of regulatory supervision of the UK financial sector, Her Majesty's Treasury is seeking public comment on the macro-prudential tools to be employed by the new Financial Policy Committee, which will be responsible for ensuring that systemic risks to the financial system are adequately addressed.

Recommendations for such macro-prudential tools include:

• the ability to set the level of the UK's counter-cyclical capital buffer;
• a power to impose sectoral capital requirements; and
• the power to set and review a leverage ratio cap (in light of international standards).

Responses to the consultation paper should be submitted by December 11, 2012.

(This is the U.K. semi-equivalent to the U.S. Financial Stability Oversight Council.)