Bank of England asks lenders about clients’ stability as Reeves brands system ‘resilient’
The Bank of England has asked lenders about their clients’ financial well-being after Trump’s tariff onslaught triggered chaos across financial markets.
The central bank asked firms for information about market liquidity and whether any of their clients were having funding problems, according to the Financial Times.
The Prudential Regulation Authority, which is responsible for the supervision of banks, building societies, credit unions, insurers, and major investment firms, has been in contact with lenders to discuss client concerns.
Discussions covered liquidity in the market and concerns that hedge fund clients would be unable to take action on margin account’s equity falling below the required level, people familiar with the matter told the FT.
This comes as Chancellor Rachel Reeves told the House of Commons she had spoken with the governor of the Bank of England, who “confirmed that markets are functioning effectively and that our banking system is resilient.”
The Chancellor said she will meet US Treasury secretary Scott Bessent ‘shortly’ in a bid to get some reprieve from Trump’s tariffs.
Global bank bosses discussed tariffs on Sunday
Global bank bosses held a call on Sunday convened by the Bank Policy Institute, as revealed by Sky News.
The call is understood to have enabled US bank executives to outline their view on the Trump administration’s trade policy to their international peers.
In attendance was Bank of America’s Brian Moynihan, Barclays’ CS Venkatakrishnan, HSBC’s Georges Elhedery and JP Morgan’s Jamie Dimon.
Dimon warned of the tariffs’ affect on “America’s long-term economic alliance” in a letter on Monday.
He wrote: “I am hoping that after negotiations, the long-term effect will have some positive benefits for the United States.”
A spokesperson for the Bank of England said: “It is standard practice for us to implement close monitoring of market liquidity conditions at times of greater volatility.”
The Bank of England Financial Policy Committee will release the record of its latest meeting on Wednesday, which will indicate its outlook on the financial market.
Sarah Breeden, the central bank’s deputy governor, will address the tariff fallout in a speech on Thursday.