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<p>The Government is committed to retaining the UK’s position as one of the most innovative
and competitive financial centres in the world. The Chancellor recently set out an
ambitious reform programme at Mansion House, building on the success of the Edinburgh
Reforms, which will help to deliver the Government’s vision for a financial sector
that is open, sustainable, technologically innovative, and globally competitive. Additionally,
the Financial Services and Markets Act 2023 introduced new secondary objectives for
both the Financial Conduct Authority and Prudential Regulatory Authority to facilitate
the international competitiveness of the UK economy (including the financial services
sector), and its growth in the medium to long term.</p><p> </p><p>Financial stability
is a pre-requisite for economic growth and is crucial for the competitiveness of the
financial services sector. The government, working closely with the financial regulators,
has made major improvements to the resilience of the banking system since the financial
crisis with capital requirements for banks now three times higher. The government
has also considered it a priority to build resilience in the non-bank system and has
been working closely with the regulators and international bodies to achieve this.</p><p>
</p><p>The Bank of England also undertakes regular stress tests on the UK’s major
banks to test their resilience to severe economic scenarios and for the first time
will be undertaking a system wide exploratory scenario which aims to improve the understanding
of how banks and non-banks behave during stress and how these behaviours might interact
to amplify shocks.</p>
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