Bank of England confirms two-layered bank stress tests for 2017

The BoE, which is still analysing the results of the 2016 stress tests before scheduled feedback to the banks next month, suggested a year ago that next year's stress tests of the major UK banks will for the first time include a second scenario.

As well as the annual cyclical scenario stress test, which aims to examine the risks to the banking system from a potential severe financial shock, there will in 2017 be an extra "exploratory" scenario.

"This will allow banks’ resilience to a wider range of potential threats to be assessed," the BoE said in a statement on Monday morning.

In 2015 the Bank has said its intention was for a biennial test to complement the annual scenario, "to probe the resilience of the system to risks that may not be neatly linked to the financial cycle" and "explore emerging or latent threats to financial stability".

Seven banks participated in the 2016 stress test and the same group will participate in both these scenarios in 2017.

The BoE will publish the results of its two stress tests the first quarter of 2017, it confirmed, while final decisions on the results of the 2016 stress tests will be made by the BoE's Financial Policy Committee and Prudential Regulation Authority board on 29 November and fed back to the firms on the same day.

The UK stress test results will be published alongside the Financial Stability Report at 0700 GMT on 30 November.