Qualified advisers answering your
Financial Questions
call 0800 092 1245

FSA stress tests consider worst-case scenario

While the Financial Services Authority (FSA) has refused to reveal the results of various stress tests on the U.K.'s financial sector and financial companies, the FSA has revealed details of its criteria. It is worth while stressing that this is a worst-case scenario, and one which is unlikely to happen, however the FSA used a figure of 12% unemployment, no growth in the economy until 2011, a 50% peak to trough fall in house prices and 60% reduction in commercial property values.

The test also assumes a 6% GDP fall and no growth until 2011, with 2012 the first positive year for the UK economy. While the criteria has been released to the public in order to show the strength of these tests, it has actually had the opposite effect in some quarters and opened the minds of many to the potential doomsday scenario considered. The fact that the FSA has been unwilling, or unable, to release the results of various stress tests carried out the last few months has concerned many as even the Authority acknowledges that this is "embedded in our regular supervisory process".

As many investors are nervous, rumours and counter rumours are circulating regarding the financial well-being of certain financial companies in the UK which is not helping the situation.

Share this..

Related stories

Financial Guides

Financial Calculators

Our useful calculators can help you get your finances in order:

Latest News


Helpful new tax year facts that could affect you and your money

Blog | Seven helpful new 2016/2017 tax year facts that could affect you and your money. Our recent online blog shares a brief outline on how to stay up to date.

Read more

Useful Links

Popular Searches

Please Enter More Details

Enter More Details