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<p><em>The Financial Policy Committee (FPC) of the Bank of England was set up to identify,
monitor and take action to remove or reduce systemic risks with a view to protecting
and enhancing the resilience of the UK financial system as part of the new financial
regulatory framework legislated for under The Financial Services Act 2012. The FPC
noted in their November 2018 Financial Stability Report that the share of households
with high mortgage debt-servicing ratios (DSRs) is close to historical lows. The FPC
has powers of direction to place limits on the proportion of new mortgages that a
bank can extend at high LTV ratios, if it judges that this is required to mitigate
financial stability risks.</em></p><p><em> </em></p><em> </em><p><em>While the Bank
therefore has powers to tackle these risks, the Financial Services Compensation Scheme
(FSCS), set up by the Government in 2001, also provides a key role in ensuring financial
stability and protecting depositors. The FSCS provides deposit protection of up to
£85,000 per person, per authorised firm. The Financial Services Markets Act 2000 gives
powers to the regulators, including the Prudential Regulation Authority (PRA) to make
the rules in which FSCS carries out its compensation function.</em></p><p> </p>
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