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The Bank of England uses Biennial Exploratory Scenario to explore the potential impact of risks which are not covered by its annual solvency stress tests of large UK banks. The 2019 test focused on how banks would respond to a severe liquidity stress.
In March 2020, the Bank announced that it was pausing the 2019 liquidity Biennial Exploratory Scenario to alleviate burdens on core treasury staff at participating banks. The Bank has now decided that it will not restart the exercise.
Insights from the liquidity BES have already helped to shape aspects of the Bank’s response to the impact of Covid-19. These insights will continue to help inform several strands of the Bank’s work in future.
Further information on the exercise, including on participation and the scenario used, can be found in the July 2019 Financial Stability Report
