Bank of England says market infrastructure passed 'COVID test'

FILE PHOTO: A worker wearing a protective face mask walks past the Bank of England in the City of London, Britain, August 6, 2020. REUTERS/Toby Melville

LONDON (Reuters) - Platforms used by markets to complete stock and bond trades stood up well to bouts of extreme market volatility in March when the economy entered lockdown to fight the pandemic, a Bank of England policymaker said on Wednesday.

BoE Financial Policy Committee (FPC) member Elisabeth Stheeman said efforts to increase how much capital banks hold since the last financial crisis also paid off to bolster resilience to shocks.

“The Covid shock has been a test of this resilience, one that the financial plumbing has so far passed,” Stheeman said in a speech.

“But there is no room for complacency: firms had time to prepare for Covid, it evolved slowly at first, allowing them time to adapt.”

The FPC, which looks for broad risks to financial stability, will continue to build up operational resilience of “market plumbing” in the areas of cyber and payments, Stheeman said.

Reporting by Huw Jones; Editing by Maiya Keidan