UK banks could withstand leveraged loan crisis
Losses projected to hit overall CET1 capital ratios by 40 basis points
Risky corporate loans held by big UK banks could inflict £9.7 billion ($12.7 billion) of losses in a severe downturn, the Bank of England stress tests show.
Leveraged loan exposures held by the seven bank participants in the tests – Barclays, HSBC, Lloyds, Nationwide, RBS, Santander UK and Standard Chartered – stood at £90 billion, the BoE found. Under the central bank’s severe stress scenario, losses on these were estimated to be 11% over two years, equivalent to a 40 basis point deduction to
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