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The Co-operative fails Bank of England stress test

The Co-operative Bank has failed a Bank of England test to see how lenders would cope with severe economic stress, which also raised concerns about state-backed Lloyds Banking Group and Royal Bank of Scotland.

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Co-operative Bank fails Bank of England stress test

The Co-operative Bank has been ordered to shore up its balance sheet by axing £5.5 billion in loans after it failed a Bank of England stress test.

The Co-operative Bank has failed a Bank of England stress test. Credit: PA Wire

The Bank found that a severe downturn with house prices plunging 35% would wipe out the Co-op's capital because of the effect on its risky commercial property and sub-prime home loans.

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