BoE delivers speech on new stress test approach for banks and other parts of the financial sector

Article summary

The Bank of England (BoE) has published a speech delivered at The City UK by its financial stability strategy and risk executive director, Nathanaël Benjamin, on its new approach to stress testing banks, and developments in stress tests of other parts of the financial sector. The new approach combines regular stress testing for cyclical risks with the flexibility to explore different risks. It consists of three key components: biennial Bank Capital Stress Tests involving bank submissions, less burdensome desk-based exercises in intervening years, and exploratory exercises for structural and emerging risks.