The Bank of England (BOE) may be worried about Brexit, but it'sconfident about the strength of the banks it regulates to weatherany storm.

The U.K.'s seven largest lenders all passed the central bank'slatest stress test, showing they're strong enough to continuelending even during a no-deal Brexit that could send the economyinto a tailspin.


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The central bank's stress test was even tougher than the dire“disorderly Brexit” scenario, which the BOE also releasedWednesday. That analysis includes an 8 percent drop in economicoutput within a year, a 25 percent drop in the pound, and a 30percent plunge in house prices.

In the stress test, two lenders—Barclays Plc and Lloyds BankingGroup Plc—triggered the conversion of some subordinated debt toequity to replenish their capital. Lloyds' exposure to U.K. housingand Barclays' large consumer focus make them more vulnerable todisruptions in the economy. No such conversion occurred for theother banks.

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