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UK banks to face house price crash and rate spike tests

2
UK banks to face house price crash and rate spike tests

The UK’s high street banks are to be stress-tested to see if they could withstand a 35% slump in house prices or a sudden spike in interest rates to 5%.

The Armageddon tests will be carried out by the Bank of England this year and any banks failing could be forced to raise fresh capital, according to a report on Sky News.

The details of the stress-tests, which were devised by the Prudential Regulatory Authority and the BoE’s Financial Policy Committee, are to be announced later today at 12:30pm.

The European Banking Authority is set to carry out similar doomsday scenario tests on continental lenders.

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