Bank Of England Warn Of "Challenging" Outlook For Britain's Financial System
Wednesday, 30 November 2016 *Ulster Bank Parent RBS Fails Bank of England Stress Test*
"Royal Bank of Scotland (RBS)(RBS.L) will cut costs and sell assets to boost capital levels, it said on Wednesday after failing this year's Bank of England stress test, which warned of a *"challenging" outlook for Britain's financial system*.
The state-backed lender rushed out a statement following the announcement to say it would take a range of actions, including selling off bad loans and cutting costs to make up the capital shortfall identified by the tests of around 2 billion pounds.
The unexpected result underlines the litany of problems RBS is grappling with, which include a mounting legal bill for misconduct ahead of the 2008 financial crisis and difficulties selling off assets such as its Williams & Glyn banking business.
The lender said it had agreed a plan of action with the Prudential Regulation Authority, the Bank of England's enforcement arm, that should mean it does not have to tap markets to raise the money needed."
We warned of the RBS, Ulster Bank *‘£100 Billion Black Hole’* and the bail-in risk due to the ‘danger of failing' in June 2014 here
Bail-ins can now be used in the UK, EU, U.S. and G20 countries. Banks internationally and especially in Europe remain vulnerable.
After Cyprus, which country will be the next to suffer bail-ins? Will RBS and by extension Ulster Bank, be the first UK and Irish banks to be subject to bail-ins?
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The governor of the Bank of England reaffirmed today that Brexit is not the biggest risk to the UK's financial system.
Speaking in front of the Treasury... City A.M. - BusinessAlso reported by •SeattlePI.com •Seattle Times
Suppose the UK had voted to stay in the EU. Would the Bank of England have hiked its benchmark interest rate by now? Yes, probably. But that didn’t happen.... City A.M. - BusinessAlso reported by •New Zealand Herald