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The top eight banks in the UK have been able to cope with rising global unemployment, falling inflation and a sharp economic downturn, Bank of England said Monday evening, when it offered lenders good credit for almost two years in the coronavirus. plague.
His findings was the result of the first stress test for the largest lender in the UK in two years after the 2020 review. eliminated due to the plague. The game did not take into account the details of the Omicron species affected but officials said they have seen a much bigger epidemic than most in 2021.
The BoE said it had also introduced a requirement for banks to keep a special rain bag, known as a “countercyclical buffer” – a requirement suspended in 2020 to give the bank a head to continue lending even though the epidemic caused significant losses.
The experiment was created after the financial crisis as a precautionary measure so that regulators could force banks to reduce their share capital, raise funds for investors or take action if a perceived problem could leave them in need of help.
The central bank tested Royal Bank of Scotland, HSBC, Barclays, Standard Chartered, Lloyds, Santander, Nationwide and Virgin Money, which were first included. It is the fifth consecutive time that all banks have passed without a mandate to take action since the annual survey began in 2014.
All eight banks were tested on the day of destruction events including £ 800bn hits in UK GDP between 2020 and 2022, UK unemployment peaked at 12 per cent and 33 per cent falling in UK residential and retail property prices at the same time.
” Now is the time to start rebuilding power so that we can be better prepared for the future, ‘said BoE governor Andrew Bailey. © Bloomberg
On the contrary, the plague has caused more strife GDP less than £ 300bn, while the latest increase in unemployment for three months until September was 4.3 percent. UK house prices have listed theirs gloryquarterly prices have risen in 15 years, although trade prices have plummeted as the epidemic has pushed people out of offices and towns.
“UK banks have solved the problem,” said Andrew Bailey, Bank of England ambassador. He said the test also included “significant fluctuations in the epidemic and economic downturns”, such as the $ 70bn overdue debt, higher than the $ 20bn borrowed bank last year.
The BoE found that banks had raised their stakes by 2020. “Now is a good time to start reorganizing power to better prepare for the future,” Bailey said, as he announced the return of the countercyclical buffer – every bank will. is expected to bring back half of the pre-Covid by December 2022.
Banks have more money than they need, so they will no longer need to raise money or cut dividends to meet new requirements.
The central bank, however, has said it will not stop lending to mortgages, even though it will discuss next year if the existing limits are reasonable.
The rules, which has been in operation since 2014, incorporates a loan mechanism that reduces the average home mortgage by no more than 4.5 times the subscribers ’income. Lenders should also demonstrate that they can repay if the interest rate increases by 3 percent.
A recent review by the central bank showed that mortgage lending had stabilized since the mechanisms were established in 2014, indicating that the restrictions protect against the increase in domestic debt. Earlier this year the bank he found that the rules were forcing about 2 percent of lenders to buy mid-range property in their area.
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