Eight UK banks to undergo "house price collapse" stress test

ManAtHome

Thrugelmir wrote: »

All European banks are undergoing proper stress testing at last. Previous tests haven't really addressed the issues on what's lurking on their balance sheets.

With counter-party derivative risks appropriately rated...

Thrugelmir

CLAPTON wrote: »

so basically raise interest rates and cut off the recover overnight

ask investors for new money in exchange for reduced share price and reduced dividend as well

and cancel the 85k government guarantee for savers



what a fantastic vote winner for the conservatives

have you considered politics as a career?

Unsure what this has to do with politics. Simply reverses the trend of poor financial management over many years. That came to a head in 2008.

Still possible that there'll be another recession before the financial crisis is finally resolved. Printing money has been shown to purely paper over the cracks than be the cure.

I made no reference to savers protection. Anyway this is funded by a levy on financial institutions. Which is a different matter to forcing banks not to rely on Government bailouts. RBS should have been allowed to go like Lehmans was. As appears more like a dead duck the longer the saga drags on.

wymondham

The fact they are using 35% drops in prices is telling isn't it??

CLAPTON

Thrugelmir wrote: »

Unsure what this has to do with politics. Simply reverses the trend of poor financial management over many years. That came to a head in 2008.

Still possible that there'll be another recession before the financial crisis is finally resolved. Printing money has been shown to purely paper over the cracks than be the cure.

I made no reference to savers protection. Anyway this is funded by a levy on financial institutions. Which is a different matter to forcing banks not to rely on Government bailouts. RBS should have been allowed to go like Lehmans was. As appears more like a dead duck the longer the saga drags on.

banks fail by defaulting on their debts

banks debts are what we call our saving or our bank accounts

no more bank bailouts means let savers lose their money

Generali

CLAPTON wrote: »

presumably it means they have already been vetted and are scheduled to pass or nearly so

The Cypriot banks all passed stress tests a few months before the doors closed.

purch

wymondham wrote: »

The fact they are using 35% drops in prices is telling isn't it??

No.

One day the Government and Bank are criticised for allowing Banks to take unnecessary risks

Next day the Government and Bank are criticised for checking that the Banks are not taking unnecessary risks

And it's the same idiots criticising them for both things :eek:

BillJones

wymondham wrote: »

The fact they are using 35% drops in prices is telling isn't it??

And what is it telling you?

It's telling me that they had to pick a number that would represent a major sell-off, and picked this one as fairly representing that. It certainly doesn't imply in any way that they think that that number is a likely outcome.

HAMISH_MCTAVISH

wymondham wrote: »

The fact they are using 35% drops in prices is telling isn't it??

They are linking 35% drops in prices and 12% unemployment, so stress testing a really bad (although highly unlikely) scenario.

It's what you'd expect in a once-in-a-generation financial crisis.

CLAPTON

purch wrote: »

No.

One day the Government and Bank are criticised for allowing Banks to take unnecessary risks

Next day the Government and Bank are criticised for checking that the Banks are not taking unnecessary risks

And it's the same idiots criticising them for both things :eek:

presumably the idiots were correct on one occasion then?

BillJones

CLAPTON wrote: »

presumably the idiots were correct on one occasion then?

In the same way that a stopped clock is right twice day, yes.