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UK regulator to step up capacity to stress test banks

FSA chief says new regime presents a 'once in a lifetime' opportunity to learn from past mistakes, and reveals plans for the FSA's transition to the new regulatory structure

UK banks will face a new regime of stress-testing as part of an overhaul of financial regulators launched by the coalition government, but regulators will carry out their own investigations rather than relying on banks or their auditors, and would step up capacity to be able to make better judgements in-house.

Hector Sants, chief executive of the Financial Services Authority, who will head new super-regulator the Prudential Regulation Authority in 2012, said the organisation plans to carry out its own stress tests on UK financial institutions to ensure the stability of the wider economy.

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