Another reason not to believe the Bank of England's stress tests

Source: Cobden Center
by Prof Kevin Dowd

"The Bank of England repeatedly reassures us that its stress tests demonstrate the resilience of the UK banking system. Well, let's put the stress tests to a stress test. We have the performance measure, the leverage ratio at the peak of the stress scenario, and we have the pass standard. A bank passes the stress test if its leverage ratio at the peak of the stress at least as high as the pass standard, and it fails the test if the leverage ratio at the peak of the stress falls short of the pass standard. Let's consider the five biggest banks: Barclays, HSBC, Lloyds, RBS and Standard Chartered." (08/07/17)

http://www.cobdencentre.org/2017/08/another-reason-not-to-believe-the-bank-of-englands-stress-tests/