A sharp, unexpected drop in commercial property values could trigger a systemic crisis in the financial system.
This is most likely to occur if, following the fall in these asset values, major retail and commercial banks
have a low ratio of capital to their risk-weighted assets.
have strictly complied with stress-testing guidelines set by the Financial Policy Committee (FPC).
maintain a significant buffer of highly liquid sovereign bonds.
have immediate access to emergency liquidity facilities provided by the central bank.
