Global aspects included in Bank stress test
31 Mar 2015
The Bank of England (BoE) is set to perform its annual stress test on UK banks to establish their ability to withstand another financial crash.
Following talks with the International Monetary Fund (IMF) the BoE will be focusing more on external factors over a five year period, major shocks such as Eurozone crises were deemed likely to pose more risk to the UK banking sector.
The banks being tested are Lloyds Banking Group, Royal Bank of Scotland, Barclays, HSBC, Santander UK and Standard Chartered.
Governor of the BoE, Mark Carney, said: ‘This year’s test will have a different focus and is equally important. By assessing the resilience of the UK banking system against a major shock, we will improve further our ability to identify vulnerabilities and we will ensure that banks have plans in place to address a wider range of problems.’
The tests include deflation scenarios in the UK, a major crash in the Chinese economy and the falling price of oil, but do not include the possibility that Greece will leave the Eurozone.