The Bank of England and Prudential Regulation Authority (PRA) have cancelled the 2020 annual stress tests, as part of a host of measures to help the market cope with COVID-19 (coronavirus).
The UK regulators have made a list of changes which aim to alleviate operational burdens on the companies it regulates. Its measures focus on giving flexibility to help firms and financial market infrastructures maintain safety and soundness and deliver the critical functions they provide the economy, they claim.
One of the steps includes the Bank of England cancelling the 2020 annual stress test for the eight major banks and building societies in the UK. This measure aims to help lenders focus on meeting the needs of UK households and businesses by continuing to offer credit.
This comes after The Financial Policy Committee (FPC) to lower the UK countercyclical buffer rate to 0% of banks exposures to UK borrowers.
The 2019 stress test showed the UK banking system was resilient to deep simultaneous recessions in the UK and global economies that are more severe overall than the global financial crisis.
Other changes include a postponement to the publication of the results of the 2019 biennial exploratory scenario (BIS) on liquidity, and the postponement on its comments on the discussion paper on climate change.
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