BoE announces changes to hurdle rates for stress test
Large UK lenders face a tougher round of stress tests in 2018, following changes to the pass/fail criteria of the Bank of England (BoE).
Systemically important banks will be held to higher standards compared with past tests. Previously, they were not punished too severely if they fell short of their set ‘hurdle rate’ – a target capital ratio set by the regulator. However, under the 2018 tests, falling short will trigger intensive remedial action in line with those forced on to non-systemic
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