Banks pass capital stress tests

However both Royal Bank of Scotland and Standard Chartered were given a warning that their capital strength was still lacking.

Commenting on the results RBS chief financial officer Ewen Stevenson said: "We are pleased with the progress we have made relative to the 2014 stress test, but recognise we still have much to do to restore RBS to be a strong and resilient bank for our customers."

Standard Chartered's chief executive Bill Winters said: "The results of the test demonstrate our resilience to a marked slowdown across the key markets in which we operate.

"The test was conducted on our balance sheet as at the end of 2014. Since then we have made further significant progress in strengthening our capital position.”

None of the banks was told to come up with a new capital plan this year following this instruction being given to The Co-operative Bank last year.

But all the banks were told they would need to set aside “countercyclical capital buffer” as part of a new measure being phased in by the Bank of England to allow banks to absorb losses from bad loans and improve their resilience to problems in the UK.

Bank of England governor Mark Carney told journalists at a press conference this morning: “The overall level of capital won't increase in the system.”

The Bank has tested seven lenders: HSBC, RBS, Lloyds, Barclays, Santander UK, Standard Chartered and Nationwide Building Society.