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Stress tests for banks ahead of Brexit Trigger

Wednesday is B-Day ....

Stress tests for banks ahead of Brexit Trigger

Wednesday is B-Day – Brexit Day - and the Bank of England (BoE) is preparing to check if Banks are prepared for a wide range of potential outcomes and can avoid sudden changes to lending as the country gets ready to leave the European Union

Just two days before PM Theresa May is about to pull the Brexit trigger, the BoE said banks will have to provide copies of contingency plans to reassure regulators that they are ready for all potential outcomes. The Bank of England's Financial Policy Committee is asking Britain's banks to show how they can avoid their continental customers being abruptly cut off after Brexit.

Bank of England Governor Mark Carney still holds the view he expressed earlier this year that he did not believe leaving the European Union was the biggest threat to British financial stability.

One area of concern is lending standards, which the Financial Policy Committee said could impact financial stability as consumer borrowing in the country soars and household debt rises relative to incomes. Areas of banking which the test will look at include low interest rates, competition from smaller banks and weak global growth.