All seven British banks and building societies in this year’s Bank of England stress test passed, indicating they could withstand a disorderly Brexit without having to curb lending.
The BoE’s Financial Policy Committee (FPC) said on Wednesday that it has reviewed a scenario whereby Britain crashes out of the European Union in March with no deal or transition period.
“The FPC judges that the UK banking system is strong enough to continue to serve UK households and businesses even in the event of a disorderly Brexit,” it said in its twice-yearly Financial Stability Report.
“No bank needs to strengthen its capital position as a result of the stress test,” it said, adding that the stress test was tougher on banks than the disorderly Brexit scenario.
Parliament is due to vote on Dec. 11 on Britain’s divorce settlement and transition deal with the EU, but it is unclear if it will be approved, raising the prospect of a no-deal Brexit.
Re-disseminated by The Asian Banker from Reuters