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By Huw Jones
LONDON, Jan 14 (Reuters) - The International Monetary Fund(IMF) could play a role in this year's health check of Britain'sbanks to help to reinforce rigour in the exercise, Bank ofEngland Governor Mark Carney told lawmakers on Wednesday.
The central bank published in December the results of its2014 stress test into how leading lenders such as Barclays, HSBC and RBS fared in a theoreticalhousing market crash and a sharp rise in unemployment. Somelenders have to boost their capital buffers as a result of thetest.
Carney told Britain's Treasury Select Committee the IMFwould be reviewing the country's financial sector this year, aperiodic exercise that ends with a public report that can becritical.
"There is merit in coordinating the stress test with thatprocess," he said, adding the IMF could provide an "independentperspective" on the methodology for this year's test.
When the results of the last test were published, the bankwas criticised for not testing resilience to a slump in thesecond half of last year in emerging markets. HSBC and StandardChartered have major activities in Asia where some ofthe weakness was focused.
Martin Taylor, a former chief executive of Barclays and nowan independent member of the BoE's Financial Policy Committee,told the lawmakers the Bank was designing this year's healthcheck based on current risks, with the scenario to be publishedaround April followed by results in the autumn.
"The chances are that as we get to the autumn, the worldwill be worrying about other things than what we put in thestress test," Taylor said. "We are not relying on the stresstest alone for the capital resilience of the banking system."
Carney said it could be useful to have a "reverse" stresstest from time to time, asking banks what scenario would it takefor them to reach their minimum capital standard across thefinancial system.
The European Union's European Banking Authority (EBA)coordinated a bigger and more complicated test of top EU lenderslast year in conjunction with the European Central Bank.
EBA Chairman Andrea Enria said in Madrid on Wednesday: "Myidea is that ... in the future we should move to a yearlyexercise, standard, simple, hopefully not so tense in terms ofexpectations around it." (Additional reporting by Jesus Aguado in Madrid; Editing byDavid Holmes)
