BoE finds financial services in improving health

The Bank of England (BoE) has claimed British financial services are in better health than they have been in recent years, with perceived probabilities of a high-impact event in the system falling to their lowest levels since 2008.

According to the BoE's semi-annual systemic risk survey, just eight per cent of industry experts think a major problem such as the collapse of a bank is likely to take place in the next year. This is down by 12 percentage points since the last report, suggesting burgeoning confidence levels in an industry that has endured some tough times recently.

This is reflected by the fact that 17 per cent of respondents were completely or very confident in the overall stability of the UK financial sector, with 70 per cent fairly confident on this. Only 13 per cent were deeply concerned about the industry.

The two main risks to the British financial system remain an economic downturn and sovereign risk - especially in the euro area, where conditions remain uncertain and discomfiting for financial services experts.

However, operational difficulties were also cited by respondents as something that could arise over the next 12 months. Almost a quarter of industry professionals suggested these could be a possibility, with cyber security highlighted as the biggest shift in this area.

The BoE recently announced that Charlotte Hogg is taking over as its chief operating officer, having previously occupied a senior role at retail bank Santander.

Mark Carney, who will replace Sir Mervyn King as governor of the central bank on 1st July, made the appointment. He hailed Ms Hogg's experience and business acumen.

"Charlotte brings an outstanding track record and breadth of experience that will help to catalyse that change and I look forward to working closely with her to realise the full potential of the new institutional structure of the bank," he added.

http://www.bankofengland.co.uk/publications/Documents/other/srs/srss2013h1.pdf