Bank Of England: Key Elements Of The 2019 Stress Test

The Bank of England has published the annual cyclical scenario that we will be stress-testing banks against in 2019.

The 2019 annual cyclical scenario tests the resilience of the UK banking system to deep simultaneous recessions in the UK and global economies, a financial market stress, and an independent stress of misconduct costs.  Overall, the stress is more severe than the financial crisis.

The Financial Policy Committee (FPC) and Prudential Regulatory Committee (PRC) judge the stress scenario to be appropriate given the FPC assessment of the current risk environment.  The stresses applied to the economic and financial market prices and measures of activity in the 2019 ACS have been adjusted, relative to the 2018 exercise, to take account of developments in the FPC’s risk assessment.

• Key elements of the 2019 stress test (PDF)
• Variable paths for the 2019 stress test (XLSX)
• Traded risk scenario for the 2019 stress test (XLSX)
• 2019 stress guidance for banks and building societies (PDF)