Bank of England joins European regulators to warn of dollar risks
Online reported that three sources said the Bank of England has asked some banks to test their resilience to potential shocks to the dollar, the latest sign of how the Trump administration's policies have eroded trust in the United States as the cornerstone of financial stability. U.S. President Trump has broken long-standing U.S. policies in areas such as free trade and defense, forcing policymakers to consider whether emergency supplies of dollars can still be relied on in times of financial stress. Following similar requests from European regulators, the Bank of England has asked some banks to assess their dollar funding plans and their dependence on the dollar, including short-term needs, a person familiar with the matter said. Another source said a U.K. -based global bank has been asked to conduct internal stress tests in recent weeks, including the possibility of a complete exhaustion of the U.S. dollar swaps market. One of the sources said that given the U.S. dollar's dominance in the global financial system and banks 'dependence on the U.S. dollar, no bank could withstand such a shock for more than a few days.
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