The Guardian
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Leading
British banks, hedge funds and asset managers are increasingly worried
about the impact of the housing market on Britain's financial system, according to the Bank of England. The Bank's latest systemic risk survey of executives at hedge funds, ...
Overheated housing market worries British finance executives
Bank of England survey shows 40% of banks, hedge funds and asset managers cite falling property prices as a key risk
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The housing market is
becoming a key concern for financial executives, according to a Bank of
England survey. Photograph: Rebekah Downes/PA
Leading British banks, hedge funds
and asset managers are increasingly worried about the impact of the
housing market on Britain's financial system, according to the Bank of England.
The Bank's latest systemic risk survey of executives at hedge funds, banks and other financial institutions found that 40% cited falling property prices as a key risk.
Their concern focused on residential property rather than the commercial end of the market and is likely to fan fears that house prices in some parts of the country are getting dangerously high.
It was the third time in a row that the biannual poll has seen an increase in the proportion of financial executives worried about house price falls. The poll also revealed rising concerns about geopolitical risks against the backdrop of tensions in Ukraine and executives continued to highlight worries over the robustness of the eurozone.
But overall, the Bank's risk survey showed that fears of a fresh financial crash continued to diminish. The perceived probabilities of a high-impact event in the UK financial system continued to fall, setting new lows since the survey began at the height of the financial crisis in 2008.
The poll of 72 market participants found almost two-thirds now consider the probability of a high-impact event to be low or very low over the next year. At 64%, that was up nine percentage points from half a year ago. Confidence in the UK financial system on average has also risen, but only slightly, the Bank said.
There was a weaker consensus among respondents over what presented the biggest risk and their answers were less skewed towards one particular risk category. An economic downturn was identified as the main risk to the financial system, cited by 61% of executives.
The importance of geopolitical risk grew markedly from a low base, with 57% now identifying it as a key risk now, up from 13% in the last survey. It is now the second most cited risk.
On a par with worries about property price falls were concerns around sovereign debt, listed under the category sovereign risk. That was cited by 40% of participants, down by 33 percentage points but still relatively high, with the "overwhelming majority of specific responses focusing on the eurozone", the Bank said.
end quote from:
The Bank's latest systemic risk survey of executives at hedge funds, banks and other financial institutions found that 40% cited falling property prices as a key risk.
Their concern focused on residential property rather than the commercial end of the market and is likely to fan fears that house prices in some parts of the country are getting dangerously high.
It was the third time in a row that the biannual poll has seen an increase in the proportion of financial executives worried about house price falls. The poll also revealed rising concerns about geopolitical risks against the backdrop of tensions in Ukraine and executives continued to highlight worries over the robustness of the eurozone.
But overall, the Bank's risk survey showed that fears of a fresh financial crash continued to diminish. The perceived probabilities of a high-impact event in the UK financial system continued to fall, setting new lows since the survey began at the height of the financial crisis in 2008.
The poll of 72 market participants found almost two-thirds now consider the probability of a high-impact event to be low or very low over the next year. At 64%, that was up nine percentage points from half a year ago. Confidence in the UK financial system on average has also risen, but only slightly, the Bank said.
There was a weaker consensus among respondents over what presented the biggest risk and their answers were less skewed towards one particular risk category. An economic downturn was identified as the main risk to the financial system, cited by 61% of executives.
The importance of geopolitical risk grew markedly from a low base, with 57% now identifying it as a key risk now, up from 13% in the last survey. It is now the second most cited risk.
On a par with worries about property price falls were concerns around sovereign debt, listed under the category sovereign risk. That was cited by 40% of participants, down by 33 percentage points but still relatively high, with the "overwhelming majority of specific responses focusing on the eurozone", the Bank said.
end quote from:
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