BoE confirms 2021 stress test

The BoE has confirmed the content of the 2021 stress test.  It will assess the major UK banks and building societies against a UK and global scenario based on a severe path for the macroeconomic outlook.  The results will act as a cross-check on the FPC judgment of how severe stress would need to be to jeopardise banks’ resilience and challenge their ability to absorb losses. BoE wants to be sure the system is resilient to a reasonable worst-case stress, and also support PRA’s objective of safety and soundness in its regulated firms.