BoE Deputy Governor Highlights Risks to Financial Stability

Dave Ramsden, the Deputy Governor for Markets and Banking at the Bank of England, recently emphasized that the UK's gilt markets are functioning in an orderly manner. However, he also cautioned about potential vulnerabilities that could lead to system-wide risks. Ramsden pointed out that highly leveraged hedge funds and the concentration of the market within a subset of funds pose significant risks to financial stability.

Ramsden warned that the comparatively calmer market conditions of this year might encourage greater risk-taking in the future. He stressed the importance of the BoE staying vigilant regarding the increasing uncertainty around the economic outlook and using its balance sheet when necessary. Ramsden concluded by stating that getting the balance right in their balance sheet operations should help maintain financial stability and lay the foundations for sustainable growth.