Free DP Download 04 February 2022 - Macro-financial policy in an international financial centre

Friday, February 4, 2022

Thorsten Beck, Simon Lloyd, Dennis Reinhardt, Rhiannon Sowerbutts CEPR Discussion Paper No. 16860 | January 2022


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.

You can now listen to a podcast where Thorsten Beck tells Tim Phillips about this research.