A sound financial system.
A financial system that households and businesses can rely on, in good times and in bad.
Confidence, kept
Money is only as useful as the system that moves it, holds it and lends it.
Financial crises are costly and slow to repair. They strike savers, borrowers and businesses alike, and they fall hardest on those with the least. A central bank helps to prevent them by watching the system as a whole, not only its individual parts, and by acting early when risks build up.
Four tasks
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Monitor
Watch for risks that build up across banks, markets and payment systems: excessive borrowing, rapid rises in asset prices, and weak links between institutions.
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Assess
Judge how well the financial system could withstand a shock, using analysis and stress scenarios.
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Report
Publish its assessment regularly in a Financial Stability Review, with the risks it sees and what it recommends.
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Respond
Act with others to keep essential financial services running in a disruption, from payments to access to cash.
A small, open economy
Small nations depend on trade, and on financial links with the wider world.
That openness brings opportunity, and exposure to events abroad. The Bank’s work on financial stability will pay particular attention to these links: to the sources of funding in the economy, to the resilience of payment systems, and to the risks a maritime economy faces from the sea and the weather.