Financial stability meaning

ARCHIVED: This Practice Note is archived and is no longer maintained. A bank loan is treated as a non-performing loan (NPL) if more than 90 days pass without the borrower making the agreed instalments or interest payments. Banks experienced an accumulation of NPLs in their books when borrowers' inability to repay was intensified by the financial crisis and subsequent recessions. When NPLs are proportionately high, banks' capacity to manage the riskiness of their lending is diminished. NPLs are a supervisory priority for the European Central Bank (ECB), which monitors the overall level of NPLs across euro area banks. Under the supervisory review and evaluation process (SREP), the ECB assesses whether individual banks adequately manage loan risk and whether they have suitable strategies, governance arrangements and processes in place. The ECB also regularly undertakes co-ordinated exercises to review the asset quality of the banks it directly supervises—it works with national supervisors to establish a consistent and effective approach to tackling and reducing bad loans, drawing on best practices as set...

This timeline outlines key milestones for the UK bank recovery and resolution framework from January 2024 onwards. For prior milestones, consult Bank Recovery and Resolution Directive (BRRD)—timeline [Archived]. 2026 Date Source Document Description 23 February 2026 Financial Stability Board Thematic Peer Review on Public Sector Backstop Funding Mechanisms: Summary Terms of Reference The Financial Stability Board (FSB) has initiated a thematic peer review assessing how FSB member jurisdictions have implemented public sector backstop funding mechanisms to support the resolution of financial institutions. The exercise evaluates delivery against Key Attribute 6 and the Guiding Principles on the Temporary Funding Needed to Support the Orderly Resolution of a Global Systemically Important Bank. The FSB has issued questionnaires to member authorities and requested input from financial firms, industry bodies, academics and other stakeholders on matters such as financial stability vulnerabilities, design aspects of backstop arrangements, and safeguards aimed at limiting taxpayer losses. Responses are due 31 March 2026, and the peer review report is planned for October...

ARCHIVED: This Practice Note is archived and is no longer maintained. After reviewing shadow banking and investment funds, the European Commission highlighted several issues concerning money market funds (MMFs). In response, it issued the original proposal for a Regulation on Money Market Funds (MMF Regulation) in September 2013, reflecting recommendations from the International Organisation of Securities Commissions (IOSCO) and the Financial Stability Board (FSB). On 29 April 2015, the European Parliament voted on a package of amendments to the draft MMF Regulation. The final text was published in the Official Journal of the EU on 30 June 2017 and took effect on 21 July 2017. The MMF Regulation seeks to strengthen investor protection and to reduce the risks that MMFs may pose to the integrity and stability of financial markets...

In this issue: Air emissions and climate change Energy for environmental lawyers Environmental disputes and proceedings Environmental permits and consents Environmental taxes, reliefs and incentives ESG and sustainability Hazardous substances and chemicals Marine Nature, biodiversity and habitat conservation Waste Waste producer responsibility regimes Water, flooding and drainage Daily and weekly news alerts New and updated content Air emissions and climate change DESNZ releases quarterly waste data reporting template for the UK ETS. The Department for Energy Security and Net Zero (DESNZ) has issued a template for quarterly waste data submissions under the UK Emissions Trading Scheme (UK ETS). It is designed for waste operators to use when sending quarterly data reports to their regulator during the voluntary monitoring, reporting and verification (MRV) period. See: LNB News 19/02/2026 50. AFME responds to European Commission consultation on climate resilience legislative framework. The Association for Financial Markets in Europe (AFME) has provided...

Treasury Committee hearing on financial stability At a Treasury Committee session on financial stability, the Bank of England (BoE) governor warned they would mount a protest if the Treasury presses too far with its deregulation aims. In the Mansion House speech on 15 July 2025, Chancellor Rachel Reeves set out proposed regulatory changes, including plans concerning ring‑fencing. Bailey said they would begin by setting out their stance plainly, in public and, if desired, before the committee. He added that this would be the starting point. He did not outline what further steps might follow, nor how they could next use what Members of Parliament describe as their wide‑ranging powers to issue recommendations, including to the Treasury. Nonetheless, he marked a clear red line around the ring‑fencing regime, which keeps retail bank accounts separate from investment banking within groups. Bailey objected to...

An open letter dated 26 April 2024 bears signatures from a spectrum of bodies, among them UK Finance and the Association of British Insurers. It presses the Chancellor of the Exchequer to confront the FCA’s plans, which, the signatories contend, would undermine the UK’s competitiveness. The regulator outlined proposals in February 2024 that, it claimed, would strengthen the deterrent impact of enforcement and permit it to name publicly the targets of its inquiries. The coalition, which also features TheCityUK and the Personal Investment Management & Financial Advice Association, argued the plans are out of step with other markets and supervisors. They warned this would render the UK an ‘international outlier’ on enforcement. ‘As drafted, the proposals are likely to harm the competitiveness of the UK’s financial services industry by deterring investors, and to produce poorer outcomes for customers,’ the letter states. Signatories ask the Chancellor to address the FCA’s proposals to avoid undermining competitiveness and worsening outcomes for customers...

IP COMPLETION DAY: At 11pm (GMT) on 31 December 2020, the Brexit transition/implementation period that followed the UK’s withdrawal from the EU comes to a close. In UK law this moment is termed ‘IP completion day’. From that point, core transitional arrangements end and significant changes start to take effect across the UK’s legal framework. This note provides guidance on areas affected by these changes. Before continuing your research, see Practice Note: What does IP completion day mean for lending lawyers? [Archived]. BREXIT: From 31 January 2020, the UK is no longer an EU Member State, but entered an implementation period during which, for many purposes, it continues to be treated by the EU as a Member State. As a third country, the UK cannot participate in the EU’s political institutions, agencies, offices, bodies and governance structures (except to the limited extent agreed), yet it must continue to meet its obligations under EU law (including EU treaties, legislation, principles and international agreements) and submit...

This Practice Note has been created in collaboration with Shafaq Sadiq of Wedlake Bell. In Islam, the ethic of ‘giving and helping’ lies at the heart of faith, as such acts greatly please Allah Subhanahu Wa Ta'ala (swt—the most glorified, the most high). The Islamic institution known as the ‘Waqf’ enables the dedication of wealth and is regarded as a very noble practice encouraged by Islamic law. for charitable or religious purposes; and as a means of family wealth management, offering financial stability to the donor’s family during their lifetime or after their death. Waqf The core idea of Waqf is sustainability, ensuring a continuing charitable endowment. The term derives from the Arabic ‘Waqafa’, meaning to halt or hold; in essence, ownership ceases by transferring the property wholly to Allah swt. Waqf is a distinctive instrument within Islam. There is no specific verse in the Quran that sets out the concept of Waqf; however, there are numerous verses in the Quran...

The work and foundations of BIS The Bank for International Settlements (BIS) supports central banks worldwide on matters of monetary and financial stability. Its headquarters are in Basel, Switzerland, with two representative offices in Hong Kong and Mexico City. Founded on 17 May 1930, it is the world’s oldest international financial organisation and regards itself as the principal centre for international central bank co-operation. It began with the settlement and administration of repatriation payments after the First World War, though that function soon waned. The BIS has since been particularly pivotal during episodes affecting financial stability, including the oil shock and international debt crises. It is now widely recognised for its role in the regulation of internationally active banks and for establishing global standards for regulatory capital, known as the Basel Capital Accord. Article 3 of its Statutes sets out clearly its purposes: to advance the co-operation of central banks to provide additional facilities for international financial operations and to act as...

Question Yes/No Have you determined how much capital the business will require in total over the five-year period? Do you have a clear strategy to manage lock-up in debtors and work in progress (WIP) to cut the level of capital required?...

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1 Introduction Robust financial management is vital to the success of any business. Putting in place financial management procedures enables us to plan for prosperity and reduce risks that could impede achieving and sustaining financial success. This document provides a summary of our financial management procedures and forms part of our wider risk management policy. This policy sets out: what financial management means; our approach to financial management; who holds responsibility for financial management; our financial management procedures; our approach to clients and matters that carry a higher than usual financial risk; our obligation to report certain events to the Solicitors Regulation Authority (SRA); details of financial management training; and the steps we will take to monitor and update this financial management policy. 2 What is financial management? Financial management involves: creating and implementing plans to promote the firm’s financial success; monitoring and controlling risks to our financial stability; ...