The Bank of England today said that the risks to financial stability caused by the Brexit vote in the referendum have begun to "crystallize."

The central bank made the comments in its Financial Stability Report, which was put together by the Financial Policy Committee.

Governor Mark Carney said the bank was closely monitoring the risks of decreased appetite for U.K. assets including equities and fixed income; adjustments in commercial real estate, which could lead to tighter credit conditions for businesses; an increase in the number of vulnerable households; and reduced and fragile liquidity in core financial markets.

In order to ease conditions, the Bank of England announced today that it would reduce the so-called counter-cyclical capital buffer rate to zero from 0.5% until at least June 2017.

"This action reinforces the FPC's expectation that all elements of the substantial capital and liquidity buffers that have been built up by banks are able to be drawn on, as necessary," the report stated. "It will reduce the regulatory capital buffers by £5.7 billion, raising bank's capacity for lending to U.K. households and businesses by up to £150 billion."

Three-quarters of banks will have higher lending capacity and this will allow "those U.K. households and businesses that want to seize post-referendum opportunities will be able to do so," Carney said.

The governor said that markets have functioned well throughout the immediate shock of the U.K.'s vote to leave the European Union at the end of June.

Of the Bank of England he said, "We have a clear plan, we are rapidly putting them in place and it is beginning to work."

However, he warned that although the FTSE 100 was doing well, domestically focused stocks have seen much more movement.

"That gives a sense of investor expectations of the economy. Movements in financial assets related to banks has been telling," Carney said.

The FPC said that equity prices of domestically focused companies have fallen 10% and equity prices of U.K. banks have lost on average 20% since the Brexit outcome. But he said that banks will be part of the solution unlike during the financial crisis when they were part of the problem.

Due to the lowering of the buffer requirement, "credit is available for those that want it... We are in a very different world than we were in 2007-2008," Carney said, adding this time around the slowing in credit will be demand driven not supply driven.

In the run-up to today's report the pound had fallen 1.3% against the dollar to $1.3113, a level not seen since 1985.

U.K 10-year government bond yields, also known as gilts, fell by 0.035 of a percentage point to 0.798%. That is only slightly higher than the post-referendum low of 0.78%.

Carney said, "Reductions in gilt yields are not consistent with an environment of growth."

The governor made few comments about further monetary easing, as that falls under the remit of the Monetary Policy Committee, which will release minutes of its last meeting on July 14. He said, "Any monetary action needs to be well laid."

He added, "During this time the banks committee are working together looking at the consequence whether intended or unintended of any policy, including monetary policy."

The FTSE 100 responded well to the report and was recently at 6,536.83, 0.23% up. Bank stocks were mixed, with Royal Bank of Scotland (RBS) and Lloyds (LYG) recently trading down close to 3%, and HSBC (HSBC) and Barclays (BCS) marginallly higher.