BOE outlines parameters of 2015 stress tests

London

THE Bank of England said that it would test major British banks on their potential performance against financial shocks including a global slowdown, a sharp drop in inflation and a reduction in worldwide appetite for risk.

This year's test is intended to better reflect the global risks and how those would filter through the system, affecting banks' capital. It will not include a default by Greece, a Greek exit from the eurozone or Britain potentially leaving the European Union. The contagion effects that a Greek default might cause, like a liquidity crisis in emerging markets, are taken into account, Bank of England officials said.