What Is the FPC?
FPC is an official committee of the Bank of England based on the Monetary Policy Committee. In 2010 it was announced that the committee would be responsible for monitoring the health of the UK economy. In addition, the organisation is responsible for looking at macroeconomic factors that may lead to negative growth consequences.
The FPC usually has around 13 members, including:
Six from the Bank of England.
Four are Deputy Governors and the Executive Director for Financial Stability Strategy and Risk.
Five external members outside the Bank of England are also selected for their expertise.
One non-voting member from the HM Treasury and the Chief Executive of the Financial Conduct Authority is also part of the committee.
The committee was established as part of the effort to improve oversight of the UK economy after the economic crisis of 2008. The new system of regulation was designed to improve financial stability.
What Is the FPC Responsible for?
In this section, we will cover the various aspects of what the FPC is responsible for. This will enable you to figure out their role in ensuring the UK economy runs smoothly, and money transfer customers can continue sending money to the UK.
Reduces risk: the FPC monitors economic trends and looks for signals that might pose a risk to the UK’s economy. Once risk is spotted, the FPC is tasked with reducing it through a mixture of financial policy changes at its disposal.
Transparency: they must provide the minutes of their meetings in the name of transparency. This ensures that people outside of the committee can know what is going on inside the meetings and what action is being taken to stabilise the economy.
Chancellor: annually, the Chancellor will send a formal letter to the committee to which they must respond. The Governor makes the response of the committee.
Meetings: the committee schedules to meet about four times per year to discuss matters relating to the economy and what actions should be taken to stabilise it.
Financial stability report: 2 times per year, the FPC publishes a Financial Stability Report. The information includes critical findings regarding financial risks to the economy and suggestions for how to deal with them.
Stress testing: with the help of the Prudential Regulation Committee (PRC), the FPC carries out stress tests to ensure they have enough funds to withstand unforeseen events and shocks in the UK’s economy.
The committee is headed by the Governor of the Bank of England (currently Andrew Bailey). If there are economic concerns, they are passed down to the Prudential Regulation Authority.
What Is the Importance of the FPC?
Now we will discuss why the FPC is a critical organisation. This will help you figure out the gravity of their work to ensure the UK’s financial markets are stable. This should give money transfer consumers confidence when transferring funds to the UK.
Stabilises the economy: the most crucial task of the FPC is to stabilise the economy so that it does not lead to hectic market conditions that put the money of regular consumers at risk. They can do this by suggesting various monetary policies and spotting troublesome trends early.
Promotes trust: the FPC's work to stabilise the economy provides more confidence so that the financial markets work. As a result, the general public can trust that financial services will continue to work when difficult economic conditions arise. Trust is important to ensure that you can use money transfer companies without a disruption in services.
Collaboration: the FPC is a mixture of professionals collaborating with other organisations. This includes the Financial Conduct Authority and Prudential Regulation Authority. Collaboration is essential to ensure that the other regulators can complete their roles with better results.
This section highlights the regulations that govern how this committee operates. This will give you an overview of their scope and where the responsibilities end. At a glance, you can get a feel of what the FPC is about.
Regulations: the Financial Policy Committee's powers can be broken down into two sets: powers of direction and recommendation. Using these powers, the FPC can advise regulators about what policy to pursue.
Therefore, the FPC does not have direct powers to make changes. Instead, they are simply a committee that offers advice that enables the regulators with powers to pull the trigger on meaningful policy changes.
Crimes: the FPC is not involved with the monitoring and dealing of criminal activity in the financial markets. Instead, they focus on bigger picture macro trends that indicate where the UK’s economy is heading.
Industry: the FPC monitors all aspects of the UK’s economy, so it covers all industries. The data it uses to make decisions is pooled from any sector contributing to the nation’s financial markets.
Accountability: the FPC is accountable to the Parliament. Also, the Governor of the Bank of England, a member of the FPC, communicates with the Chancellor annually.
What Regions Does the FPC Cover?
The FPC is responsible for overseeing the entire UK economy. Therefore, its reach extends to all parts of the country. The committee will also pay attention to economic trends to better understand how they will affect the UK’s economy.
When Might You Encounter the FPC?
Money transfer customers will not encounter the FPC because they have no responsibilities that overlap with general public interactions. Instead, they focus on bigger-picture aspects of the economy that do not deal with everyday consumers.
Can the FPC Make New Rules?
The FPC is not a regulator with the power to change existing rules. However, their duties include offering direction and suggestions to the UK’s main regulatory bodies that can change the rules for stabilising and meeting the challenges of today. Therefore, they can influence the changing of regulations indirectly.
How to Contact the FPC?
This section shares how you can contact the FPC if you want to learn more about their work. However, the FPC does not have dedicated contact details. Instead, we will share the contact details for the Bank of England, which is the next best thing when trying to learn more about the FPC.
Phone: 020 3461 4444 (Monday to Friday, 9 am to 5 pm)
Overall, the FPC is not a regulator but a committee that meets a few times per year to discuss macro-level economic trends related to the health of the UK’s economy. They provide the UK’s top regulators with advice and direction on navigating the waters to stabilise the financial markets. This should give money transfer customers peace of mind that a committee exists to stabilise an economy where they might want to send large sums of money.
To learn more about the process of sending money to the United Kingdom, we encourage you to read our other guides. You can start with Send Money To the UK and Send Money to the USA from the United Kingdom. These guides offer advice on what companies to choose for getting the best FX rates and lowest fees.