Britain’s eight largest banks have passed the stress test: they have enough capital to remain resilient under Bank of England (BoE)-style conditions worse than even the 2008 global financial crisis.
The UK banking system will continue to be able to support households and businesses in a period of rising interest rates, even if the country’s economic and financial conditions are more difficult than currently anticipated.
The eight banks account for 75 percent of British loans.
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They are prepared with an extreme stress scenario
According to the Bank of England, the results of the stress test show that major UK banks are resilient in the face of an extreme stress scenario which includes:
In the typical case, the banks’ capital adequacy remained above the required level, and none of the studied financial institutions needed to increase capital.
Barclays plc, HSBC Holdings plc, Lloyds Banking Group, National Building Society, NatWest Group plc, the British arm of Banco Santander SA, Standard Chartered plc and Virgin Money UK plc participated in endurance test.
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