The Tripartite Standing Committee: Meetings and Publications

1. The Treasury, the Bank of England and the Financial Services Authority (FSA) constitute the UK’s Tripartite Standing Committee that considers matters of financial stability. A published Memorandum of Understanding (MoU)¹ sets out arrangements for co-operation between Standing Committee members in this field. The guiding principles of the MoU are that there should be clear accountability, transparency, no duplication of efforts and regular information exchange between the three parties. Standing Committee provides the regular high-level forum for such information exchange. It generally meets monthly at deputies’ level with the possibility that any member authority may call a meeting at short notice if necessary. A sub-group of Standing Committee also meets monthly to consider work on contingency planning for an operational disruption and financial sector resilience.

2. Work on financial stability conducted by the Standing Committee generally remains confidential because:

of constraints under EC and UK law on the disclosure of regulatory information;
publication could discourage private sector practitioners and foreign financial authorities from supplying information to HM Treasury, the Bank and the FSA on an informal basis; and
the disclosure of a Standing Committee interest in a particular issue could, in some circumstances, exacerbate problems which the Committee is seeking to avoid.

3. For these reasons, the Standing Committee’s meeting agendas, papers and minutes are not normally published.² However, the authorities are committed to putting considerations of financial stability matters into the public domain. For instance, the Bank of England publishes its Financial Stability Review twice a year whilst the FSA publishes its Financial Risk Outlook annually. Both the Bank and the FSA also describe their financial stability work in their annual reports.

4. As indicated by the contents of the Financial Stability Review and Financial Risk Outlook, types of issues which the Standing Committee has considered in its work include:

risks specific to a particular key financial institution, or group of similar institutions at home or abroad;
risks emerging from structural features of the financial system;
sectoral or geographical risks. For example concerning the national financial system of another country that could have implications for the UK;
risks arising from economic conditions;
operational risks, such as those associated with Y2K and, more recently, with the possibility of disruption caused by terrorist actions or other man-made or natural disasters. In some of these cases, disclosure about such risks may be less sensitive. For example, a Standing Committee website³ and an annual report⁴ describe aspects of its work on issues raised by potential operational disruption.

Other Published Work

5. In 2001-03, the Standing Committee steered the UK’s work on the International Monetary Fund’s (IMF) Financial Sector Assessment Programme (FSAP) assessment of the UK. The FSAP assesses the financial stability arrangements of an IMF member and the robustness of its financial services sector to financial instability. In its steering group role, the Standing Committee acted to ensure that the UK authorities provided the IMF with the assistance it required to ensure an effective UK FSAP. The IMF published its papers and conclusions in February⁵ and March 2003.⁶

6. Following the Treasury’s consultation on The Financial System and Major Operational Disruption⁷ in February 2003, Sir Andrew Large (Deputy Governor of the Bank of England for Financial Stability) was asked to establish a taskforce to examine the possible need for legislative powers in the event of major operational disruption to the UK financial system. The Task Force, which also included representatives from the FSA and Treasury as well as interested private sector experts, concluded that no new legislation is needed to cater for disruption in the financial sector. Its report was published in December 2003.⁸

¹ Memorandum of Understanding between HM Treasury, the Bank of England and the Financial Services Authority (2006)
² Department for Constitutional Affairs guidance regarding the application of statutory exemptions contained within the Freedom of Information Act 2000 specifically identifies Standing Committee documents as some of those that may need to remain unpublished to avoid prejudice to the economic interests of the UK (the section 29 exemption); see paragraph 2.8. (external link)
³ UK Financial Sector Continuity website (external link)
⁴ Financial Sector Business Continuity Progress Report; published on the website above.
⁵ Financial Sector Assessment Program - Review, Lessons, and Issues Going Forward (external link)
⁶ PDF file of Financial Sector Assessment Program (external site)
⁷ The Financial System and Major Operational Disruption
⁸ Report of the taskforce on major disruption in the financial system