Section 5: Prospects for financial stability

Chart 5.1 International equity indices (a) Sources: Thomson Reuters Datastream and Bank calculations. a)Denominated in units of local currency. b)November 2012 Report.

Chart 5.2 Changes in banks’ CDS premia (a) Sources: Markit Group Limited and Bank calculations. a)The sample shown is the largest 20 European banks by assets. b)Includes Barclays, HSBC, LBG, RBS and Standard Chartered.

Chart 5.3 Systemic Risk Survey: key risks to the UK financial system (a)(b) Sources: Bank of England Systemic Risk Surveys and Bank calculations. a)Respondents were asked to list the five risks they thought would have the greatest impact on the UK financial system if they were to materialise. Answers were in a free format and were coded into categories after the questionnaires had been submitted; only one category was selected for each answer. Chart figures are the percentages of respondents citing a given risk at least once, among respondents citing at least one key risk. The chart shows the top seven categories. For further details see the 2013 H1 Survey. b)Risks cited in previous surveys have been regrouped into the categories used to describe the latest data.

Chart 5.4 Historical government bond yields (a)(b)(c) Source: Global Financial Data and Bank calculations. a)Ten-year yields. b)Due to data limitations, the UK series prior to 1753 uses yields on 3% UK annuities and from 1753–1958 is compiled from yields on UK Consolidated Stock (Consols). As Consols are undated stock, the time-series comparison is only approximate. Long-dated or perpetual government securities are also used for the German, Japanese and US series where yields on ten-year bonds are unavailable. c)Due to data limitations, no data are shown for Germany from 1915 to 1946 or Japan from 1947 to 1948.

Figure A Illustrative diagram of how banks could meet the FPC’s capital requirements (a) Source: Bank of England, published accounts and Bank calculations. a)Proportions are illustrative of the aggregate balance sheet of the major UK banks, with total assets of £7.3 trillion at end b)Includes equity securities and other (non-sovereign) debt securities. c)Includes liabilities under insurance and investment contracts, settlement balances, accurals and short positions.

Figure A Illustrative diagram of how banks could meet the FPC’s capital requirements (a) Source: Bank of England, published accounts and Bank calculations. a)Proportions are illustrative of the aggregate balance sheet of the major UK banks, with total assets of £7.3 trillion at end b)Includes equity securities and other (non-sovereign) debt securities. c)Includes liabilities under insurance and investment contracts, settlement balances, accurals and short positions.

Figure B CRD4/CRR transition path for the LCR Source: Bank of England. a)Member states will have discretion to set LCRs within the ranges specified.

Table 5.A EDTF recommendations Source: Enhanced Disclosure Task Force.