RBS and Standard Chartered singled out in Bank stress test

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Royal Bank of Scotland and Standard Chartered have been singled out as the weakest of seven lenders in a Bank of England stress test.

The BBC reports the Bank has subjected the UK’s seven largest lenders to tests to measure whether they would survive a financial shock.

Banks were tested against a scenario where oil had fallen to $38 a barrel and the global economy had slumped.

RBS and Standard Chartered were found not to have enough capital strength, but both took steps to raise additional capital.

The lenders were not told by the Bank to come up with a new plan, as Co-operative Bank was last year after similar tests.

The five other lenders tested – HSBC, Barclays, Lloyds Banking Group, Santander and Nationwide – did not have to take action.

RBS chief financial officer Ewen Stevenson says: “We are pleased with the progress we have made relative to the 2014 stress test, but recognise we still have much to do to restore RBS to be a strong and resilient bank for our customers.”

Standard Chartered chief executive Bill Winters says: “The results of the test demonstrate our resilience to a marked slowdown across the key markets in which we operate.

“The test was conducted on our balance sheet as at the end of 2014. Since then we have made further significant progress in strengthening our capital position.

“We are operating at capital levels above current minimum regulatory requirements and have a number of additional levers at our disposal to further manage capital.”

All banks were told they would have to set aside capital to protect their UK exposures as part of a new measure the Bank is phasing in called a countercyclical capital buffer.