The FPC already has powers over the risk-weighted countercyclical capital buffer [The Bank of England is designated as the authority for setting the CCB, with policy functions to be exercised by the FPC as a Committee within the Bank of England.]. The CCB is designed to provide an additional capital buffer to absorb unexpected losses at times of elevated risks to financial stability and to provide incentives for banks to rein in excessive or underpriced exposures, which might reduce losses following a downturn in the credit cycle. The FPC proposes to apply a countercyclical leverage ratio buffer (CCLB) to complement the risk-weighted CCB, as discussed in Section 3.
The FPC has explained how it will set the UK CCB rate in its Policy Statement on its powers to supplement capital requirements [Bank of England (2014c).]. When the FPC does not judge there to be material threats to resilience in the United Kingdom, it expects the CCB rate applied to UK exposures to be set to zero. When the F
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