The BoE has launched its 2025 Bank Capital Stress Test, aimed at the seven largest and most systemic UK banks and building societies.
The test replaces the Annual Cyclical Scenario, and involves a hypothetical stress scenario designed to assess the resilience of the banking system to:
- deep simultaneous recessions in the UK and global economies;
- large falls in asset prices;
- higher global interest rates; and
- a stressed level of misconduct costs.
The 2025 test will feature a macroeconomic scenario, a financial markets and traded risk scenario and a misconduct stress. The test is the first to occur since the end of transitional arrangements under the International Financial Reporting Standard 9 accounting standard, introduced in 2018.
The results will be published at an individual and aggregate level in Q4 2025.