The Bank of England has published a document setting out its approach to stress testing the UK banking system: see here (pdf). Covering the period to 2018, the document explains that the Bank's approach is designed to be explicitly counter cyclical: the severity of testing, and associated regulatory capital buffers, will therefore vary with the state of the financial cycle.
Thursday, 22 October 2015
UK: The Bank of England's approach to stress testing the UK banking system
The Bank of England has published a document setting out its approach to stress testing the UK banking system: see here (pdf). Covering the period to 2018, the document explains that the Bank's approach is designed to be explicitly counter cyclical: the severity of testing, and associated regulatory capital buffers, will therefore vary with the state of the financial cycle.
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