Deloitte comments on the Bank of England’s 2019 stress test

Ian Wilson, head of financial risk measurement at Deloitte said:

“The results demonstrate the financial resilience of UK’s top seven banks and building societies. With an aggregate stress CET1 ratio that is more than twice the level before the global financial crisis and above the set hurdle rates, the Financial Policy Committee takes the view that banks are well-capitalised. This has demonstrated that the UK financial system has the financial stability to navigate the economic challenges anticipated in 2020.

“However, to reflect the current risk levels, the FPC has raised the level of the countercyclical capital buffer from 1% to 2%, which is to take effect over the course of the next year.

“The Bank of England’s qualitative review noted improvements in banks’ stress testing frameworks, acknowledging benefits still to be gained from firmly embedding insights gained in business planning and risk management.

“The inclusion of ring-fenced banking subgroups on a standalone basis and the tests being extended to the UK’s top eight banks, should make 2020 a year of continuous improvement for stress testing for all banks.”

End

Notes to editors

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