Royal Bank fails stress tests

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© Elliott Brown flickr
RBS: Fared the worst amongst British banks.

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.

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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.

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