BOE to Hold Broader Stress Tests Alongside Annual Checkup

The Bank of England said on Monday it would hold a broader stress test of British banks’ resilience alongside its regular annual check-up of their financial health.

The central bank will release the results of this year’s stress test at 0700 GMT on Nov. 30, alongside its half-yearly Financial Stability Report, and will go ahead with plans set out in 2015 to conduct a broader test as well in 2017.

“Next year the Bank of England’s stress test of major banks will for the first time include two scenarios. In addition to the Annual Cyclical Scenario … there will be an additional ‘exploratory’ scenario,” the BoE said.

“This will allow banks’ resilience to a wider range of potential threats to be assessed,” the BoE added.

The annual stress test typically focuses on potential near-term threats to banks. This year’s test looks at the dangers from a “severe slowdown” in the British and global economy.

The lenders undergoing the stress tests in 2017 will be the same as those under scrutiny on Nov. 30 – Barclays (BARC.L), HSBC (HSBA.L), Lloyds Banking Group (LLOY.L), Nationwide Building Society, Royal Bank of Scotland (RBS.L), Santander UK (SAN.MC) and Standard Chartered (STAN.L).

The central bank also released a record of its Financial Policy Committee’s latest quarterly discussions which took place on Sept. 20.

via Reuters

Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza