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UK banks strong enough to cope with 'disorderly' Brexit, Bank of England says

Tuesday, Nov 28 2017
UK banks strong enough to cope with 'disorderly' Brexit, Bank of England says

The UK's seven biggest lenders are all strong enough to cope with a "disorderly" no-deal Brexit, according to a Bank of England assessment. But the Bank said it would consider whether the firms needed to hold billions more capital as an emergency buffer in case such a scenario coincided with a wider global downturn. The Bank's financial policy committee also set out a wishlist of actions required to mitigate the risks to UK financial services posed by the departure from the EU.

For the first time since the annual stress testing regime began in 2014, all the major lenders received a clean bill of health, though the weakest two - Barclays and state-backed Royal Bank of Scotland - struggled. The tests modelled a nightmare scenario under which UK GDP slumps by 4.7% amid a wider global downturn, unemployment rises to 9.5%, the pound plunges and the Bank's interest rate climbs to 4% - while house prices undergo a record 33% collapse. They were carried out on Lloyds Banking Group, HSBC, Barclays, RBS, Santander UK, Standard Chartered and Nationwide.

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