This judgement was based on analysis in a ‘reverse stress test’ exercise, conducted in August 2020, which calculated how severe the economic paths for the UK and global economies would need to be in order to deplete regulatory capital buffers by around 5 percentage points. In December 2020, the Financial Policy Committee (FPC) judged that UK banks, in aggregate, have capital buffers that allow them to lend in and remain resilient to a wide range of possible outcomes for the UK and global economies. At this point stress tests are used to assess whether the buffers of capital that banks have built up are large enough to deal with how the prevailing stress could unfold.įollowing the Covid outbreak, the Bank cancelled the 2020 concurrent stress test and instead undertook desktop analysis of the resilience of the UK banking sector to the unfolding stress. Once the economy enters a real stress, such as that driven by the Covid-19 (Covid) outbreak, the focus changes. News and publications Open News and publications sub menu.Option-implied probability density functions Gross Domestic Product Real-Time Database The PRA’s statutory powers and enforcement Money Markets Committee and UK Money Markets Code Greening our Corporate Bond Purchase Scheme (CBPS) Operational resilience of the financial sector Financial market infrastructure supervision
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