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STRESS TESTS: Barclays, RBS and Standard Chartered found to have had 'capital inadequacies'

Nov 30, 2016, 12:44 IST

Matt Cardy / Getty Images

LONDON - Royal Bank of Scotland, Barclays and Standard Chartered came up lacking in the Bank of England's stress tests.

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The three banks had to submit plans to the regulator detailing how they would raise capital and boost their resilience to financial shocks.

"While the Prudential Regulation Authority (PRA) Board judged that some capital inadequacies were revealed for three banks (The Royal Bank of Scotland Group, Barclays and Standard Chartered), these banks now have plans in place to build further resilience," the central bank said.

"The Financial Policy Committee (FPC) judged that, as a consequence of the stress test, the banking system is in aggregate capitalised to support the real economy in a severe, broad and synchronised stress scenario."

The tests examined how the UK's seven biggest banks would weather a domestic and global depression, and cope with high fines for misconduct.

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The other four lenders - Santander, HSBC, Lloyds and Nationwide - managed to pass the scenario with enough capital.

The scenario was the toughest yet for the Bank of England.

"The stress scenario is estimated to lead to system-wide losses of £44 billion over the first two years of the stress, around five times the net losses incurred by the same banks as a group over 2008-09," the regulator said.

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