What does the Financial Policy Committee monitor in the UK?

The Financial Policy Committee (FPC) in the UK is primarily responsible for monitoring macroprudential standards. This involves overseeing the financial system as a whole, identifying and addressing systemic risks that could threaten financial stability. By focusing on the macroeconomic factors that affect the entire financial system, the FPC aims to ensure a resilient banking sector and mitigate risks that might lead to broader economic crises.

Through its assessment of macroprudential standards, the FPC can implement policies that promote sustainable lending practices, manage housing market risks, and ensure that financial institutions maintain adequate capital and liquidity levels. This regulatory oversight is crucial for maintaining confidence in the financial system and preventing potential downturns caused by excesses in credit or asset bubbles.

The other options represent narrower or different focuses that do not align with the overarching responsibilities of the FPC. This clarity on the role of the FPC highlights its widespread influence on the stability and health of the UK's financial landscape.