BoE Governor Andrew Bailey said in a EU banking conference that the central bank is “by no means out of firepower”. “In terms of our policy tools, and we will use that firepower as appropriate, properly and strongly in response to second and third waves, where we think it is necessary,” he added.
Bailey also urged the banking sector to tap into the capital buffers. “I understand there is a natural unease to do that. Given the history of this, given the financial crisis, it’s a brave person who says ‘yes, I am going to run my capital ratio down’,” Bailey said. “We have to use the stress test to demonstrate that is a realistic and sensible policy”.
Separately, he also said the impact of the second wave of coronavirus won’t be as damaging as the first. Though, the told Yorkshire Post, “there will be a degree of natural caution… The policy tools will be used to the fullest extent possible to support the businesses and people of this country.”
