Central bank restricts 'stress tests' to largest UK retail banks

London

BRITAIN'S smaller lenders and British units of foreign investment banks will escape the Bank of England's annual "stress tests" of their resilience to financial shocks, the central bank said on Wednesday.

The BoE said it preferred to maintain its focus on major banks which account for 80 per cent of lending to Britain's economy, but left the door open to broaden the scope of its annual probes to include non-bank firms such as asset managers. "The United Kingdom needs banks that can weather shocks without cutting lending to the real economy," BoE governor Mark Carney said.