Housing tools revisited 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  Bank of Portugal, Lisbon 3 July 2019  I am grateful to Iren Levina and Katie Low for their help in preparing these remarks. 1  All speeches are available online at www.bankofengland.co.uk/news/speeches  I am very pleased today to be in Lisbon. The Bank of England has a long history. But we are relative teenagers compared to the Aliança Inglesa or Anglo-Portuguese alliance dating back to 1373 – that is, I think, the oldest alliance still in force in the world. We do however have a long history for a central bank. We were over 150 years old by the time the Banco de Portugal was founded in 1846. But a long history is not always a good thing.
stress testing which is applied not only to the banking sector, but also to other related sectors, as they may also be carriers of systemic risk, be exposed to systemic risk from banks or, conversely, pass this risk on to banks. Such sectors include insurance companies, pension funds and professional market participants. And, importantly, in this type of stress testing intermediaries’ involvement in financial groups and holding companies is taken into account. Work on macroprudential stress testing has already begun at the Bank of Russia, and we have already taken the first steps in this direction. In 2017, the Bank of Russia began to publish its “Review of Financial Market Risks”, instead of the previously published “Money Market Review”, and the results of comprehensive stress testing of the financial market can be found in this new edition. Reflected in this work is the interaction of different categories of financial intermediaries in different financial market segments by means of network analysis tools. Further steps to be taken involve linking financial sector risks to shocks to the real economy, in which the effects of stress may be further exacerbated due to the feedback effect. At the end of this year, we will present the results of macroprudential stress testing in our “Financial Stability Review”. In the future, we will be able to use this to further develop the measure and calibration of macroprudential tools.