BRITAIN’S biggest international banks will be put through their paces by the next Bank of England stress tests, which will be unveiled today.
Standard Chartered, HSBC and Barclays are expected to be pushed hardest by the 2015 tests, which will check how well they would perform if an economic crunch was to hit emerging markets.
Last year’s tests focused on a crash in UK housing markets, with a 35 per cent fall in house prices and a spike in unemployment.
That fictional scenario put the strain on UK-centric banks such as Lloyds and RBS, as well as the Nationwide building society. Those banks will still be affected this time around – a crash in Asia would hit the UK economy – but the focus will firmly be on the global players.
Analysts already think there is a chance new Standard Chartered boss Bill Winters will have to raise capital with a rights issue, and this could be a catalyst for such action.
The stress tests are also a serious operational challenge to the banks.
Last year, enormous numbers of staff were seconded and consultants hired to knock the bank’s data into shape, so it fitted the Bank of England’s requirements, and was comparable to that of other lenders.
As the tests will take place every year, the industry is keen to make sure the required data are available in the correct format more easily.
As a result, they are investing heavily in IT to avoid such disruption this year and in future.