U.K. authorities clarify role, responsibilities of institutions in event of financial disruption

What is called the Tripartite Authorities (U.K. Treasury, the Bank of England, and the Financial Services Authority) has published an updated “Memorandum of Understanding for Financial Stability.” The updated publication aims to clarify the roles and responsibilities of each of the individual arms of the Tripartite in the event of a major operational disruption or a financial crisis. The memorandum also sets out the current framework for monitoring and assessing, and coordinating the authorities’ responses to financial stability risks, including business continuity issues.

A framework for co-operation between the three authorities in the areas of financial stability risk management and business continuity was first set out in a Memorandum of Understanding in 1997. It has proved to be robust and effective as a basis for responding to financial stability risks, but financial markets and institutional roles have evolved over the past eight years and these changes have been reflected in the updated MoU. In particular, the response frameworks for managing both financial crises and major operational disruption have advanced significantly and this is spelled out in the new text.