The Bank of England (BoE) has published a summary of responses received to its October 2013 Discussion Paper on stress-testing framework for UK banks. The feedback was accompanied by a positive reception from respondents and support in continuing this course of action in the future, in an effort to enhance financial stability. The summary of responses includes findings on the:
- purpose of stress testing;
- frequency and timing of stress tests;
- coverage of institutions;
- asset quality reviews and stress testing;
- outputs of stress tests;
- modelling of scenarios;
- remedial and policy actions;
- expectations of banks;
- details of the issues where the feedback to the Discussion Paper has influenced the design of the 2014 stress test relating to international co-ordination; and
- framework for assessing capital adequacy and scenario design.
The BoE intends to publish further material setting out how it intends to develop the stress-testing framework following the completion of the 2014 stress test. This further material will take into account the responses to the Discussion Paper as well as the lessons learned from the 2014 stress test.
View Summary of feedback received on the stress testing Discussion Paper, 19 May 2014