Bank stress tests too easy - papers

The FSA has gauged banks and building societies' capital strength by assuming a halving in house prices, a 60pc collapse in commercial property values, a 6pc contraction in GDP, no economic growth until 2011, and 12pc unemployment. To pass, banks must maintain a tier one capital ratio of 4pc, and building societies 7pc. The City watchdog said: "The current stress scenario models a recession more severe and more prolonged than any since the Second World War." However, economists and analysts said the tests were not stretching enough. Jonathan Pierce, banks analyst at Credit Suisse, descr...