By Huw Jones
LONDON (Reuters) – The shock from coronavirus to banks is set to be greater but less prolonged than lenders faced in last year’s stress test and the financial system remains resilient, the Bank of England said on Tuesday.
“Major UK banks are well able to withstand severe market and economic disruption,” the BoE’s Financial Policy Committee said in a statement from meetings it held on March 9 and March 19.
The FPC had already announced that banks can use the capital they hold in their counter cyclical capital buffers (CCYB) to support lending worth up to 190 billion pounds and it indicated on Tuesday that banks could go further if needed.
“The cut in the CCyB reinforced the FPC’s expectation that all elements of the substantial capital and liquidity buffers that have been built up by banks could be drawn on, as necessary to support the economy,” the FPC…