BoE unveils new systematic stress tests
Stress tests designed to move counter-cyclically with financial cycle
The Bank of England (BoE) is linking its stress tests to the financial cycle with the aim of making them more systematic and counter-cyclical, it said today (October 21).
Unveiling plans for the next three years of stress testing, the BoE said it would aim to vary the severity of tests based on whether the financial system is in an upswing or downturn. As exuberance grows the tests are designed to become tougher. Although banks will not know the exact shape of the test in advance, this gives
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