Macro-financial policy in an international financial centre: the United Kingdom experience since the global financial crisis

Thorsten Beck, Simon Lloyd, Dennis Reinhardt and Rhiannon Sowerbutts

No 16860, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: 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: Macroprudential policy; Spillover effects; International financial centre; Cross-border banking flows (search for similar items in EconPapers)
JEL-codes: F34 G21 G28 (search for similar items in EconPapers)
Date: 2022-01
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