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Below are some key takeaways from the Bank of England’s Financial Stability Report that includes the stress test results.

  • All seven banks, building society have passed their 2018 stress test.
  • Contingent capital used at Lloyds, Barclays to pass under full implementation of new IFRS 9 accounting rule.
  • No bank needs to strengthen capital position as a result of the stress test.
  • Test shows sector can withstand a no-deal, no transition Brexit and continue lending.
  • Banks have trillion pounds in liquidity to withstand three-months’ freeze in funding markets.
  • Banks could withstand many months of no access to foreign currency market.
  • Counter-cyclical capital buffer unchanged at 1 percent.
  • Ready to cut counter-cyclical capital buffer “If economic stress were to materialise”.
  • EU should spell out its conditions for cross-border clearing of derivatives under a no-deal Brexit.