On 25 June 2020, the Bank of England (BoE) published a record of the Financial Policy Committee (FPC) covering decisions taken since 7 May 2020.
Among other things the FPC agreed that it was appropriate to maintain the UK Countercyclical Capital Buffer (CCyB) rate at 0% in Q2 2020. The FPC also reaffirmed that it was important that banks should have clarity about the period of time it expected the UK CCyB rate to remain at 0%. It restated both of its previous judgements: (i) that it expected to maintain a UK CCyB rate of 0% until at least March 2021, absent any material change in the outlook; and (ii) that the pace of return to a standard times UK CCyB rate would depend on banks’ capital depletion over this period, and their ability to rebuild whilst supporting the UK economy, households and businesses. Due to the usual 12 month implementation lag, any subsequent increase would not be expected to take effect until March 2022 at the earliest.