Market News
Bank of England scrutinizes lenders for dollar risk, sources say - REUTERS
STORY: Sources say the Bank of England has asked some lenders to test their resilience to potential U.S. dollar shocks.
It's the latest sign of how the Trump administration's policies are eroding trust in the U.S. as a bedrock of financial stability.
As the leading currency for global trade and capital flows, the U.S. dollar is the lifeblood of global finance.
But Donald Trump has broken from long-standing U.S. policy in areas such as free trade and defense.
It's forced policymakers to consider whether the emergency provision of dollars in times of financial stress can still be relied on.
People with direct knowledge of the situation told Reuters that the UK's central bank has requested that some lenders assess their dollar funding plans.
And the degree to which they depend on the U.S. currency.
Another of the sources said in one instance, a global bank based in Britain was asked to run stress tests, including scenarios where the U.S.-dollar swap market could dry up entirely.
