May 7, 2020 / 6:29 AM / in 19 days

Banks can withstand pandemic fallout on economy - BoE

LONDON, May 7 (Reuters) - A “desk top” stress test has shown that top banks and building societies can withstand the anticipated economic fallout from the coronavirus pandemic, the Bank of England said on Thursday.

The BoE’s Financial Stability Report said the stress test was based on an economic scenario outlined by the Bank’s Monetary Policy Report (MPR).

“The MPR scenario embodies a very sharp economic shock, resulting in cash-flow difficulties for businesses and rising unemployment,” the report said.

“These developments would generate material losses for banks on their corporate and household loans. Overall, in the desktop stress test based on the MPR scenario, banks incur total credit losses of just over 80 billion pounds [$98.86 billion].” ($1 = 0.8093 pounds) (Reporting by Huw Jones Editing by Maiya Keidan)

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