First BoE stress test uncovers capital shortfall
Co-op bank fails test while RBS and Lloyds expected to raise more capital
The Bank of England's first ever stress test of the UK banking sector uncovered capital shortfalls at three major banks, the central bank revealed today.
Co-operative Bank, Royal Bank of Scotland and Lloyds were all asked to raise capital as a result of the exercise, although only Co-op failed the test outright.
The 'pass mark' was common equity Tier I totalling at least 4.5% of risk-weighted assets under the stressed scenario. Co-op's capital was "exhausted" under stress, the BoE said, falling
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