BOE FSR: Investors may be underpricing risks in global markets
Following are the key takeaways from the Financial Stability Report (FSR), published by the Bank of England (BOE) Financial Policy Committee (FPC) that includes the UK banks stress results.
No UK Banks required strengthening the capital position, even though a disorderly Brexit scenario.
Even in the worst case, Brexit scenario banks could still lend.
Five banks met all capital ratio buffers/ Barclays and RBS marginally below.
PRC deems all seven banks have sufficient capital to meet test standard.
FPC raises Countercyclical buffer (CCyB) to 1.0 from 0.5%.
Banks have continued to strengthen capital buffers during 2017.
FPC stress test encompasses a wide range of macroeconomic risks linked with Brexit.
Banks pass stress tests based on current balance sheets.
Investors may be underpricing risks in global markets.
Risks to the UK from global debt levels, asset valuations, and financial misconduct remain material.
The UK vulnerable to reduced foreign investor appetite for the UK assets.