Stress tests are being conducted to ensure banks are capable of averting a new economic shockwave. Over in the United Kingdom, several banks are struggling to meet the criteria. In fact, the Royal Bank of Scotland failed the test completely, despite receiving a major bailout by taxpayers eight years ago. Every since the financial crisis took place, the bank has not learned much from prior mistakes.
Things are not looking all that positive for the Royal Bank of Scotland right now.Eight years ago, the bank struggled financially and received a bailout. With over £45.5bn being pumped into the institution, most of the issues should have been resolved. Unfortunately, that is far from the case. In fact, the bank failed a recent stress test conducted by the Bank of England.
Such a stress test is done to ensure banks are financially healthy. If a new economic crisis were to hit, they need to be prepared. With the Brexit vote taking place, such a crisis only seems to be a matter of time. The recent stress tests confirmed most banks can survive such a crisis, except for one.