The seven major English banks ready for the worst in case of Brexit hard – RT in French

The Bank of England has just released a report on stress tests carried out on the country's main banks. She imagined, in the worst case scenario, a brutal recession of 8% and a collapse in real estate prices.

Two weeks before a crucial vote on Brexit in the House of Commons, the Bank of England has just released a report on the impact of different exit scenarios on UK banks. This study, commissioned by the Parliament, scrutinizes the seven major UK financial institutions: Barclays, HSBC, Lloyds, Santander UK, Royal Bank of Scotland, Nationwide Building Society and Standard Chartered.

According to this report, in the scenario of a Brexit called "disordered" that is to say without agreement, the seven banks could cash a cumulative loss shock on their debts and their stock exchange transactions up to 170 billion pounds sterling (191 billion euros). And, according to the institution, they have enough capital to continue to exercise their lending activity, which is essential for the economy.

Together they have 1,000 billion pounds of so-called "liquid" assets, that is to say, tradable at any time, such as sovereign bonds, which would even allow them to survive three months of disruption in their financing markets . It is true that, on 23 November, the European Securities and Markets Authority had been kind enough to announce that it would continue to recognize temporarily the UK clearing houses that handle interbank payment transactions for customers in the European Union. They now capture 90% of hedging transactions on foreign exchange and interest rate risks of European companies.

In the worst-case scenario envisaged by the Bank of England, the unemployment rate would reach 7.5%, housing prices would fall by 30% and the economy would shrink by about 8% in one year, a more severe crisis. serious than that of 2008.

In addition, the UK "loses the benefit of existing trade agreements with non-EU countries that it enjoys as a member state," says the central bank. The issuing institute also imagines a situation where "the UK's border infrastructure is also supposed to be unable to cope with customs requirements".

But, at the top of its report, the Bank does not fail to stress that these are not "forecasts" but only scenarios intended to prevent banks in crisis to assess their ability to resist.

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