The Bank of England has published its Financial Stability Report for July 2026, providing its assessment of the resilience of the UK financial system and the risks that could threaten that resilience.
The report concludes that the UK financial system is well-capitalised and has the capacity to absorb a range of adverse shocks without threatening the stability of the system or the ability of financial institutions to serve the real economy. The Bank's stress test found that the major UK banks would remain above their capital requirements even in a severe economic downturn.
But the report also identifies several risks that require attention. The growth of private credit markets, which are less transparent and less regulated than public markets, could be a source of instability. The concentration of critical services in a small number of third-party providers creates single points of failure. And the risk of a cyber attack on critical financial infrastructure remains "the most acute operational risk facing the financial system."
The report is the Bank's most comprehensive public assessment of financial stability and is published twice a year. It is used by the Financial Policy Committee to calibrate the regulatory tools that are designed to protect the financial system from the build-up of systemic risk.
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