STRESS tests conducted by the Bank of England have found that the Royal Bank of Scotland would fare the worst among Britain’s banks if a major economic catastrophe occurs.
RBS failed the annual check-up and is now forced to embark on a £2 billion programme of cuts to ensure it can handle another crisis.
Lloyds, HSBC, Santander UK, Barclays and Nationwide were also tested amid a financial climate the Bank of England has described as boasting an ‘elevated risk’ of crisis, as lending rates begin approaching 2008 levels in the aftermath of the Great Recession.
The test analysed the readiness of the banks in the event of £44 billion being wiped off the value of the capital markets in two years. The BoE found that the British banking system would be able to withstand such a calamity, even if only by the skin of its teeth.