Financial System Resilience: Lessons from a real stress  Speech given by Sir Jon Cunliffe, Deputy Governor Financial Stability, Member of the Monetary Policy Committee, Member of the Financial Policy Committee and Member of the Prudential Regulation Committee  Investment Association Webinar, London Tuesday 9 June 2020  1  All speeches are available online at www.bankofengland.co.uk/news/speeches  The COVID 19 natural disaster has been the toughest test of the financial system since the global financial crisis 10 years ago. As the implications of the spread of the virus and the policy measures to contain it became apparent, over a few short weeks, we saw an abrupt and savage pricing down of economic prospects and economic assets across the globe. Investors, corporates, banks and households went into a defensive crouch, shunning risk, searching for safer havens, and stockpiling liquidity. Many of the resultant moves were unprecedented. Bank lending surged as corporates drew down on their liquidity facilities. In March, UK banks’ net lending to corporates shot up to £ billion, around 30 times the average monthly lending seen last year. The jump was even more striking in the US, where growth in the stock of corporate lending rose by over $ billion in the first four months of the year, compared to an increase of less than $ billion for 2019 as a whole. In financial markets, the FTSE All-Share index fell over 10% on 12 March, the largest one-day fall since 1987.
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