Macro-Financial Policy in an International Financial Centre: The United Kingdom Experience Since the Global Financial Crisis
36 Pages Posted: 4 Feb 2022
Date Written: January 2022
We describe the macroprudential and monetary policy environment in the United Kingdom (UK). We highlight the UK's position as an international financial centre, and the implications for inward and outward spillover effects of monetary and prudential policy actions. These spillovers pose particular opportunities and challenges for policymakers, and we explain how they have motivated specific developments to the Bank of England's modelling framework. We also present novel empirical evidence that monetary policy actions in the UK have outward spillover effects through cross-border lending that can, in part, be mitigated by macroprudential actions in receiving countries.
Keywords: cross-border banking flows, international financial centre, macroprudential policy, spillover effects
JEL Classification: F34, G21, G28
Suggested Citation: Suggested Citation