LONDON (Reuters) – The Bank of England said it was working with Britain’s finance ministry and international partners to make sure “all necessary steps are taken” to protect its banking system and the broader economy from the impact of coronavirus.
European shares steadied on Monday after their worst weekly fall since the 2008 financial crisis, driven by rising hopes that major central banks will step in to counter the impact of the epidemic on global growth.
The heads of the U.S. Federal Reserve and the Bank of Japan have told investors that the central banks they lead will take steps necessary to respond to the spread of coronavirus, prompting investors have price in more stimulus.
“The Bank continues to monitor developments and is assessing its potential impacts on the global and UK economies and financial systems,” the BoE said.
“The Bank is working closely with HM Treasury and the FCA (Financial Conduct Authority) – as well as our international partners – to ensure all necessary steps are taken to protect financial and monetary stability.”
The yield on two-year British government debt <GB2YT=RR> fell to its lowest since September 2017, while the FTSE 100 Index of blue-chip companies was up 1.9% at 0935.
BoE Governor Mark Carney said on Friday that Britain would be unable to avoid an economic hit from the spread of coronavirus. A day earlier Deputy Governor Jon Cunliffe said there was a limit to what the central bank could do to
The FCA, Britain’s financial markets watchdog, said it was working closely with the financial services sector to ensure it was responding effectively to the outbreak.
“This is in conjunction with the Bank of England,” the FCA said.
“As you would expect we have been in contact with a wide range of firms across the sector. We expect all firms to have contingency plans in place to deal with major events so that they are able to continue operating effectively. And, as part of that, to consider how best to support their customers.”
A survey showed on Monday that the global spread of coronavirus was starting to be felt in Britain’s economy with factories reporting a big jump in delays for parts.
(Writing by William Schomberg; editing by Kate Holton)