LONDON, Oct 10 Reuters Britain39;s banking system is well capitalised to withstand shocks the Bank of England said on Tuesday, adding that next year39;s annual health check of major lenders will dispense with bankbybank results while a stocktake of stress testing takes place.

The BoE has been testing the resilience of banks such as Barclays, Lloyds, HSBC and NatWest to theoretical shocks annually for about a decade, typically publishing bankbybank results that analysts and markets scrutinise for vulnerabilities.

The UK banking system is well capitalised, supported by strong recent profitability, and has high levels of liquidity, the BoE39;s Financial Policy Committee said in a statement.

Banks continue to have the ability to support households and businesses as they face a cost of living crisis and rising interest rates, the Bank said.

The BoE said that for 2024, its test would be desk based meaning banks would give the Bank details of their balance sheets, allowing it to test resilience using several scenarios.

Only aggregate results will be published, as was the case with an emergency deskbased stress test during the COVID19 pandemic.

Stress tests were introduced after the global financial crisis of 2008 to help plug capital gaps, but in recent years, all banks have fared well, making them more of a tool to check for hidden vulnerabilities rather than determinant for capital levels.

Typically, banks are given one adverse scenario to test themselves against and…