banks can support uk economy in disorderly brexit
Last Updated : GMT 09:40:38
Themuslimchronicle, themuslimchronicle
Themuslimchronicle, themuslimchronicle
Last Updated : GMT 09:40:38
Themuslimchronicle, themuslimchronicle

Bank of England

Banks can support UK economy in disorderly Brexit

Themuslimchronicle, themuslimchronicle

Themuslimchronicle, themuslimchronicleBanks can support UK economy in disorderly Brexit

Bank of England said lenders could support the economy through a "disorderly" Brexit
London - Muslimchronicle

Britain's lenders could support the economy through a "disorderly" Brexit, the Bank of England said Tuesday, as the sector passed its latest round of stress tests.

The central bank ruled however that the nation's seven top retail banks must hold another £6.0 billion ($8.0 billion, 6.7 billion euros) in combined capital reserves to safeguard against crisis.

The BoE added Tuesday that all seven -- comprising Barclays, HSBC, Royal Bank of Scotland (RBS), Lloyds, Nationwide, Santander and Standard Chartered -- passed its stress assessments for the first time since it began testing in 2014, and are "resilient" to recession.

"The stress-test scenario ... encompasses a wide range of UK macroeconomic risks that could be associated with Brexit," read a statement from the BoE's Financial Policy Committee (FPC).

"As a result, the FPC judges the UK banking system could continue to support the real economy through a disorderly Brexit."

- 'In nobody's interest' -

BoE governor Mark Carney, speaking at a press conference, warned however that a messy Brexit was "in nobody's interest" and would have "an economic impact on households and businesses".

Britain will leave the European Union in March 2019 after the nation voted last year to leave the bloc, but the terms of its exit and future trade relationship are under negotiation. There are concerns a deadlock in the talks could see Britain leave without a trade deal in place, potentially causing severe disruption to its economy.

Carney added that a disorderly Brexit -- one in which no trading relationship is arranged -- is "not a good scenario".

"It is one we are all working to avoid as it has some quite material economic costs -- even if the financial system continues to operate through it," he noted.

The BoE added that, in order to preserve the continuity of existing cross-border insurance and derivatives contracts, British and EU legislation would be required following Britain's departure.

Some six million UK policyholders, 30 million European Economic Area (EEA) policyholders, and around £26 trillion of outstanding uncleared derivatives contracts could otherwise be affected, the central bank warned.

The stress assessments were meanwhile designed to see whether the banking sector can weather a fierce worldwide recession, crashing house prices and soaring unemployment.

However, the BoE cautioned that both a chaotic Brexit and a global recession -- combined with misconduct costs -- could result in "more severe" economic fallout than the tests anticipate.

The FPC regulator, established after the global financial crisis and tasked with safeguarding Britain's financial system, added it would lift its capital buffer rate from 0.50 percent to 1.0 percent by November 2018.

That will give Britain's retail lenders combined capital reserves of £11.4 billion.

"The combination of a disorderly Brexit and a severe global recession and stressed misconduct costs could result in more severe conditions than in the stress test," the FPC said in its Financial Stability Report.

"In such circumstances, capital buffers would be drawn down substantially more than in the stress test and, as a result, banks would be more likely to restrict lending to the real economy."

- 'Resilient to recession' -

Barclays and RBS fared the worst in the tests, struggling in the central bank's severe economic stress scenario.

However, the pair passed because they have already taken action to strengthen their balance sheets since the end of last year.

Edinburgh-based RBS had been the only bank to fail the last tests in November 2016.

"For the first time since the Bank of England launched its stress tests in 2014, no bank needs to strengthen its capital position as a result of the stress test," the BoE added Tuesday.

"The 2017 stress test shows the UK banking system is resilient to deep simultaneous recessions in the UK and global economies, large falls in asset prices and a separate stress of misconduct costs."

source: AFP

themuslimchronicle
themuslimchronicle

Name *

E-mail *

Comment Title*

Comment *

: Characters Left

Mandatory *

Terms of use

Publishing Terms: Not to offend the author, or to persons or sanctities or attacking religions or divine self. And stay away from sectarian and racial incitement and insults.

I agree with the Terms of Use

Security Code*

banks can support uk economy in disorderly brexit banks can support uk economy in disorderly brexit

 



Themuslimchronicle, themuslimchronicle

GMT 09:23 2017 Wednesday ,19 April

1105 food baskets distributed in Yemen

GMT 09:35 2018 Monday ,08 January

Trump marijuana policy reversal stokes fears

GMT 11:09 2017 Saturday ,16 December

Russia poses risk to undersea cables: UK defense chief

GMT 09:56 2017 Thursday ,02 November

Digital subscriber gains rev up NY Times profit

GMT 01:38 2016 Thursday ,29 December

Iraqi President meets Kuwaiti Foreign Minister

GMT 17:37 2017 Tuesday ,21 February

Le Pen refuses to wear veil, fails to meet with Mufti

GMT 01:48 2016 Monday ,13 June

Pioneering solar pilots 'make sci-fi a reality'

GMT 18:45 2016 Wednesday ,21 December

Several Qaeda militants killed in drone strike

GMT 07:28 2018 Thursday ,11 January

As US freezes aid, Pakistan dismisses economic fears

GMT 11:14 2017 Sunday ,12 March

My video is flagrant but smashed the charts

GMT 09:21 2018 Wednesday ,10 January

unveils London boutique and appoints MG Empower

GMT 07:48 2018 Thursday ,04 January

L’Oréal Professionnel unveils Alexa

GMT 07:41 2017 Saturday ,19 August

Brief tourism impact from Spain attacks

GMT 00:02 2017 Friday ,22 December

UK-Iranian prisoner could be released

GMT 21:53 2016 Tuesday ,14 June

Israeli tech second only to Silicon Valley

GMT 00:25 2017 Friday ,27 October

Ex-HSBC executive can face US extradition: UK court

GMT 07:44 2017 Wednesday ,20 September

Iran asks award-winning film-maker to report to prosecutor

GMT 10:34 2017 Saturday ,11 November

Politics free? Even country music awards poke Trump

GMT 07:59 2017 Sunday ,17 December

Embassy in London marks Accession, National Days
Themuslimchronicle, themuslimchronicle
Themuslimchronicle, themuslimchronicle
 
 Themuslimchronicle Facebook,themuslimchronicle facebook  Themuslimchronicle Twitter,themuslimchronicle twitter Themuslimchronicle Rss,themuslimchronicle rss  Themuslimchronicle Youtube,themuslimchronicle youtube  Themuslimchronicle Youtube,themuslimchronicle youtube

Maintained and developed by Arabs Today Group SAL.
All rights reserved to Arab Today Media Group 2023 ©

Maintained and developed by Arabs Today Group SAL.
All rights reserved to Arab Today Media Group 2023 ©

muslimchronicle muslimchronicle muslimchronicle muslimchronicle
themuslimchronicle themuslimchronicle themuslimchronicle
themuslimchronicle
بناية النخيل - رأس النبع _ خلف السفارة الفرنسية _بيروت - لبنان
themuslimchronicle, themuslimchronicle, themuslimchronicle