The UK Financial Services Authority has updated its stress tests for banks, requiring them to hold capital that could withstand a double-dip recession resulting in a peak to trough GDP fall of 8.1%.
In its Financial Risk Outlook for 2010, the FSA revealed that it was toughening up the stress tests under which it requires banks to maintain a 4% core tier one capital ratio for a five year period in a severe economic downturn. Its updated parameters are harsher in
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