empty
30.03.2023 01:23 PM
Bank of England says the UK banking system is in good shape

Pound is ready to storm the March highs, all thanks to the recent statements of Bank of England Governor Andrew Bailey. He said the central bank is going to be very vigilant in the face of continued volatility and suggested that the market is testing banks to find weaknesses.

Earlier, many banks suffered as they were worried that they will see a similar collapse to that of several regional US banks. The demise of Credit Suisse and its purchase by UBS also shook markets.

This image is no longer relevant

Bailey told the UK Treasury Select Committee that US authorities were dealing with specific issues relating to regional banks in the US and that Credit Suisse was an "institutional story", confirming that the UK banking system was in a strong position in terms of capital and liquidity and was not threatened by anything.

"I'm also thinking about what we saw at the end of last week, particularly on Friday, when there were some pretty sharp movements in the markets," he said. "It was all about testing the resilience of the global banking system. I would like to be wrong, but there are a lot of things being done at the moment that should not have been done."

Bailey also pointed out the differences between US and UK regulations regarding the treatment of interest rate risk. He said it caused the UK system to be less exposed than US regional banks.

He also supported the view of many experts that Credit Suisse's sale in Europe will clearly not cause new stresses in the global banking system. "I don't think there will be any problems in the future. But I want to let you know that we are very vigilant, and frankly we are in a period of very high stress and wariness," Bailey said.

The banking crisis had been caused by the Fed and other central banks around the world, as they have aggressively raised interest rates in recent years in an attempt to curb rapidly rising inflation. Their move led to tighter credit conditions, as well as lower bond portfolios on banks' balance sheets, making them vulnerable to the crisis.

Current technical picture shows that GBP/USD bulls are ready to keep storming the monthly highs, but the quote has to stay above 1.2280 and break through 1.2340. That will certainly prompt a rise to 1.2390 and 1.2450. Should bears take control of 1.2280, a breakdown will occur, which will push the pair down to 1.2220 and 1.2160.

In EUR/USD, bulls have all the chances to continue growth towards new March highs. But for this to happen, the quote has to stay above 1.0820. Only by that will the pair be able to go beyond 1.0870 and rise to 1.0900 and 1.0945. In case of a decline below 1.0820, the pair will approach 1.0780 and 1.0740.

Jakub Novak,
Analytical expert of InstaForex
© 2007-2025
Select timeframe
5
min
15
min
30
min
1
hour
4
hours
1
day
1
week
Earn on cryptocurrency rate changes with InstaForex
Download MetaTrader 4 and open your first trade
  • Grand Choice
    Contest by
    InstaForex
    InstaForex always strives to help you
    fulfill your biggest dreams.
    JOIN CONTEST

Recommended Stories

USD/CAD. Analysis and Forecast

The USD/CAD pair is showing a modest recovery from levels below 1.3600, retracing most of the previous day's losses, supported by a rebound in the U.S. dollar. In addition, concerns

Irina Yanina 13:09 2025-06-13 UTC+2

AUD/JPY. Analysis and Forecast

The AUD/JPY pair has been under selling pressure for the third consecutive day, reaching an almost two-week low around 92.30 during Friday's Asian session. After a sharp drop, spot prices

Irina Yanina 12:53 2025-06-13 UTC+2

Israeli Missile Strike on Iran Will Crash Global Markets (I Expect Bitcoin and #NDX to Resume Their Decline After a Local Upward Correction)

As I anticipated, the lack of a broad positive outcome in negotiations between China and the U.S. and renewed inflationary pressure led to a sharp decline in demand for corporate

Pati Gani 10:10 2025-06-13 UTC+2

Greed Will Do the Market No Good

The less you know, the better you sleep. Encouraged by a 21% rally in the S&P 500 from its April lows, the crowd continues to buy the dip—completely unbothered

Marek Petkovich 09:35 2025-06-13 UTC+2

What to Pay Attention to on June 13? A Breakdown of Fundamental Events for Beginners

Several macroeconomic reports are scheduled for Friday, but we doubt that the data will significantly impact traders today—especially today. As a reminder, Donald Trump intends to raise tariffs

Paolo Greco 07:16 2025-06-13 UTC+2

GBP/USD Overview – June 13: The Court Won't Stop Donald Trump!

The GBP/USD currency pair continued its upward movement on Thursday and nearly updated its three-year high. For most of the day, quotes hovered around the 1.36 level

Paolo Greco 03:41 2025-06-13 UTC+2

EUR/USD Overview – June 13: America's Economy Gets Lucky

The EUR/USD currency pair continued its strong upward movement throughout Thursday. Is anyone still puzzled as to why the U.S. dollar keeps falling? From our point of view, the reasons

Paolo Greco 03:41 2025-06-13 UTC+2

Trump Sends Out "Letters of Happiness"

It has been less than two weeks since Donald Trump raised import tariffs on steel and aluminum for all countries except the UK. While negotiations with the UK were deemed

Chin Zhao 00:21 2025-06-13 UTC+2

GBP/USD. A Weak Pound Stronger Than a Weak Greenback

Following weak UK labor market data, equally soft figures on British economic growth were released on Thursday. Almost all components of the report came out in the "red zone," increasing

Irina Manzenko 00:20 2025-06-13 UTC+2

The Dollar Flees the Battlefield

The old becomes new again. The word "recession" again trended in the Forex and other financial markets. May's U.S. Consumer Price Index (CPI) fell short of Bloomberg analysts' forecasts. Following

Marek Petkovich 00:20 2025-06-13 UTC+2
Can't speak right now?
Ask your question in the chat.
Widget callback
 

Dear visitor,

Your IP address shows that you are currently located in the USA. If you are a resident of the United States, you are prohibited from using the services of InstaFintech Group including online trading, online transfers, deposit/withdrawal of funds, etc.

If you think you are seeing this message by mistake and your location is not the US, kindly proceed to the website. Otherwise, you must leave the website in order to comply with government restrictions.

Why does your IP address show your location as the USA?

  • - you are using a VPN provided by a hosting company based in the United States;
  • - your IP does not have proper WHOIS records;
  • - an error occurred in the WHOIS geolocation database.

Please confirm whether you are a US resident or not by clicking the relevant button below. If you choose the wrong option, being a US resident, you will not be able to open an account with InstaForex anyway.

We are sorry for any inconvenience caused by this message.