Banks in the U.K. need to stress-test their assumptions on capital levels by incorporating the possibility that the country's growth could stage a peak-to-trough fall of 8.1%, the U.K.'s Financial Services Authority said Wednesday.
The stress tests, outlined in the FSA's annual financial risk outlook, are designed to ensure banks have enough capital to withstand financial turmoil until 2014. They take account of a bigger fall in GDP than stress tests in 2009 which had to account for a GDP fall of 6.9%.
The tougher requirements on growth come after a larger contraction in GDP during 2009 than the FSA ...
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