Systemic financial crisis

A severe economic downturn and/ or crisis of confidence precipitates the failure of one or more UK systemic banks. This could be driven by domestic or international developments which pressure UK financial institution or the UK economy more broadly. This would have a major negative impact on GDP (Gross Domestic Product) by reducing bank lending, consumption and broader investment.

An international crisis would have further negative impacts on the UK economy due to reduced trade and foreign investment. Such a crisis would likely lead to a recession, and accompany pressures on living standards.