The Bank of England governor took a mighty leap downwards in capital thresholds demanded of lendersMission accomplished? Assessing the capital health of the UK’s banks is a neverending task,of course, but Mark Carney, and governor of the Bank of England,seems pleased with the current state of affairs. “UK banks are now significantly more resilient than before the global financial crisis,” he declared. Lending to the real economy could continue even if severe stresses materialise. The UK banking system is “within sight” of the optimal level of capital.
The tremendous seven lenders passed their stress tests, or though it was a narrow squeak for Royal Bank of Scotland and Standard Chartered. None will own to raise more capital as a result of the tests. Even a hike in the modern counter-cyclical capital buffer,designed to ensure credit keeps flowing when economic storms arrive, “will not, or in itself,change the overall capital requirements for UK banks”. Related: Bank stress tests fail to quell doubts Continue reading...
Source: theguardian.com