Deloitte comments on BoE stress test scenarios 2017
27 March 2017
David Strachan, head of Deloitte’s EMEA Centre for Regulatory Strategy, said:
“No other central bank or supervisor has done anything like the exploratory scenario before. It is uncharted waters for both the BoE and banks.
"For both scenarios there is a very knotty problem for banks, namely to incorporate a number of regulatory, accounting and structural changes that will take place over the horizon of the forecasts.
“Beyond that, the two scenarios are actually quite different and complementary. Both are stress tests in the way that a Test match and a 20:20 match are both cricket.
"The exploratory scenario will necessitate bolder management actions over the longer term, which will potentially force banks to consider new, more strategic business model changes”.
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