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New plan accepted by Bank of England

RBS fails latest ‘stress test’ on handling a crash

RBS GogarburnRoyal Bank of Scotland plans to raise an additional £2 billion to bolster its cash reserves after it became the only high street bank to fail the latest ‘stress tests’ on their ability to withstand another crash.

A new plan by RBS has been accepted by the Bank of England’s Prudential Regulation Authority.

Barclays missed one of the core hurdles but its current plan to strengthen its capital position means it does not need to take further action.

Standard Chartered failed to meet one requirement. However, the Bank of England has not asked for a new plan to be submitted.

HSBC, Lloyds, Nationwide and Santander passed the test which was more challenging than in previous years and included the possibility of Chinese GDP falling in absolute terms. The Bank of England also added the prospect of the banks needing to pay fines for misconduct.

Ewen Stevenson, RBS chief financial officer, said: “We are committed to creating a stronger, simpler and safer bank for our customers and shareholders.

“We have taken further important steps in 2016 to enhance our capital strength, but we recognise that we have more to do to restore the bank’s stress resilience including resolving outstanding legacy issues.”

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