Further details of the process have been released - following the refusal of a Freedom of Information request on the matter last week.
The City watchdog has revealed further details of the "stress tests" it used to judge the financial health of British banks earlier this year.
According to the Financial Services Authority (FSA), the future scenario against which the banks' strength was assessed involved unemployment hitting 12 percent and house prices suffering a total fall of 50 percent. Currently, the jobless total stands at just over seven percent, while house price falls stand at around 15-20 percent.
The news release seems to represent a change in policy from the regulator. Previously, the FSA has refused to give details of the stress tests except to say that the banks in question - Lloyds, RBS and Barclays - had passed and were therefore strong enough to survive the scenario. The watchdog even turned down a Freedom of Information request from news agency Bloomberg requesting further details on the matter last week.
However, while the FSA has now made the scenarios public, it has not said how each individual bank's balance sheet performed in the tests.The regulator said: "Since the FSA's use of stress tests has not been a one-off exercise, but instead embedded in our regular supervisory processes, the FSA will not, as a matter of practice, be publishing details of the stress test results."
It added: "The stress tests used are not forecasts of what is likely to happen but deliberately designed to be severe."
