BOE FPC: EU Rules Could Constrain FPC's Ability To Act

The Bank of England's committee in charge of financial stability said European Union rules could hinder its ability to act, and welcomed efforts by the U.K. government to prevent that happening, minutes from the committee's latest meeting showed Wednesday.

Members of the Financial Policy Committee said at the March 16 meeting that "implementation of the FPC's macroprudential powers... might be constrained by EU law or regulatory or technical standards."

In particular, they said the "scope and timing" of FPC action to ensure financial stability could be hindered by draft EU legislation aimed at implementing the new Basel III capital requirements.

Committee members welcomed the U.K. Treasury's efforts to ensure EU legislation didn't impede the FPC's ability to use its tools.

The FPC currently holds an advisory position only, pending the passage of legislation granting it powers to act. That is expected to happen later this year or in 2013.