Britain's major banks would be able to withstand a "hard Brexit" scenario, according to the Bank of England's (BOE) annual stress test of the U.K. financial system.
In the BOE's latest report published Tuesday, the Bank found the U.K.'s seven-largest lenders would be able to continue lending even if Britain were to abruptly leave the European Union (EU) in 2019.
"Let's be clear, this is a big call … Because we will be here in March 2019 in the unlikely event that we end up in a situation without a transition deal or without an agreement. So we are putting our money where our mouth is," BOE Governor Mark Carney said in a press conference.
The test — the fourth annual assessment conducted by the BOE — found Britain's major banks were all resilient to a scenario more severe than the global financial crisis.
Its latest health check on the banking sector simulates U.K. GDP (gross domestic product) crashing 4.7 percent, world GDP slipping 2.4 percent, unemployment soaring to 9.5 percent, house prices tumbling by a third and interest rates climbing to 4 percent.