Bank Of England Spares U.S. Banks From Stress Tests

The Bank of England said on Wednesday it won't include U.K. subsidiaries of major global banks, such as J.P. Morgan Chase & Co. and Citigroup Inc. , in its annual stress tests. The U.K. central bank has previously indicated that large units of foreign lenders would have to undergo the same health checks as their U.K.-based counterparts to ensure they would be able to absorb economic shocks. But in the BOE's latest approach to stress testing the financial system, it backtracked and said "U.K. subsidiaries of foreign-owned investment banks will not be brought into scope at this time, but this will be kept under review." For the U.K. banks subject to the test -- including Barclays PLC , HSBC Holdings PLC , Standard Chartered PLC , Royal Bank of Scotland Group PLC and Lloyds Banking Group PLC -- the capital buffer needed to pass the check will rise from next year.