Banks in Britain may have to hold more capital than their international rivals under proposals for an annual stress test of lenders put forward by the Bank of England on Tuesday.
The BoE spelled out how it will begin checking for the first time that banks do not pose risks to the UK economy by being short of reserves, both individually and as a sector.
It will start an annual test for the top eight UK lenders like Barclays, RBS and HSBC in 2014.
Medium-sized British banks are likely to face a cut-down version of the test, and clearing houses could face their own health checks later on, the central bank said.
"Stress-testing can provide a quantum leap in transparency and accountability," BoE Deputy Governor Paul Tucker said.
Source: Reuters
