Bank of England happy that British banks are stable

THE Bank of England’s latest stability report is upbeat about the ability of UK banks to deal with any unexpected yet serious economic surprises and says they will be able to continue to lend during the pandemic.

Since the major economic crisis more than 10 years ago, British banks have recovered significantly and have built up good capital reserves which means that they should be able to continue to trade successfully.

There appears to be no fear from the banks now in the event of a no-deal Brexit and the Bank of England says that the UK’s financial stability is safe due to actions already taken to cope with any Brexit problems.

It does warn however that there may be some disruption to financial services in the short term but it should be within the banks powers to deal with such problems.

The Government has helped the situation with the creation of guarantees which underwrite business loans currently standing at €80 billion (€88 billion).

The review concludes that there would have to be some significant yet highly unlikely damage to the economy with unemployment rising to 15 per cent and house prices dropping by 30 per cent before the banks could be considered to be in trouble.

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