The Bank of England (BoE) launches its stress tests of British banks on Wednesday and focuses on how a disaster scenario linked to the Covid-19 pandemic, spread over several years, would affect them.
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To test the banking institutions, the BoE has concocted a scenario much more pessimistic than its official forecasts: "
including the economic shocks of 2020, the scenario forecasts a cumulative decline over three years of 37% of British GDP compared to 2019 and 31% of world GDP
”, details the institution in a press release.
In November, before the United Kingdom was affected by a new variant of the coronavirus, the BoE, on the contrary, expected the economy to rebound by 7.25% in 2021, after a drop of 11% in 2020.
The BoE also wants to know if banks are ready for a possible long-term shift in consumer behavior, made more cautious and less spendthrift, especially when it comes to restaurants, hotels and travel, and who could keep these new habits. .
Eight banking establishments, which represent 75% of British loans, are concerned.
If the BoE says that "
there is no automatic link between the results of the test and the regulation
", the conclusions drawn "
will be taken into account by the prudential authority (PRA)
" in the way in which the remuneration of shareholders is supervised.
Read also: The Bank of England keeps its key rate at its historic low
After banning share buybacks and dividend payments in March, at the height of the pandemic crisis, the PRA allowed major UK banks to pay up to 25% of their profits in dividends.
The United Kingdom is the country in Europe most bereaved by the pandemic, with more than 91,000 deaths, but also one of those where successive lockdowns have damaged the economy the most.
Economists now fear a double recession in the UK after that of the spring, with a drop in gross domestic product expected for the fourth quarter of 2020 and the first of 2021.
