FSA surprises UK banks with tougher stress tests

LONDON – Banks in the UK will undergo further stress tests based on worsening macro-prudential scenarios, the results of which will almost certainly require more capital. The Financial Services Authority (FSA) published its annual Financial Risk Outlook  on March 10, which requires banks to take into account a fall in GDP of 2.3% from the end of 2009 and a gradual recovery after the end of 2011. That would mean an overall slump of 8.1% from before the crisis – despite optimism after the UK