BoE changes stress test framework but keeps scenario the same
Stress tests will attempt to gauge impact of IFRS 9
The Bank of England will hold the UK’s seven largest banks to a higher standard when it conducts its annual stress test in 2018.
BoE’s financial policy committee (FPC) outlined the key elements of this year’s stress scenario today (March 16), setting out revisions in how it calculates hurdle rates.
For the first time, “hurdle rates will incorporate buffers to capture domestic systemic importance as well as global systemic importance”, the FPC says.
“On a risk-weighted CET1 [common equity
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