BoE FPC's quarterly statement highlights challenges for UK's financial stability after Brexit

Bank of England Financial Policy Committee released its quarterly statement earlier on Thursday in which it said that Britain still faces a "challenging period" for financial stability despite resilience seen after the European Union referendum, and rules for banks must remain stay tight.

No new regulatory recommendations were announced today. The FPC stood by its decision in July to reverse a move made earlier in the year that could have increased banks' capital requirements. It said that capital rules would not be watered down regardless of Britain’s future relationship with the EU.

That said, the central bank said it would undertake a regular review of banks' lending in November "to insure against the risk of a marked loosening in underwriting standards and a significant rise in the number of vulnerable households." Stress tests to be published in Nov will also be watched to see how banks would cope with the risks created by China's rapid lending growth.

BoE noted that risks had already materialized in Britain's commercial real estate sector. Transactions now stood at the lowest since 2009. The Bank also reiterated concerns about the UK's near record current account deficit, which stands at 6.9 percent of GDP. "The risk remains of a fall in overseas investors' appetite to invest in the UK," it stated.