Bank of England to focus on trade war in 2025 stress test of central counterparties

LONDON, April 25 (Reuters) - The Bank of England said on Friday it will focus on a scenario involving a market panic about a trade war and sovereign debt risks in this year's stress test of central counterparties, which form a key part of global financial infrastructure.

The stress test covers ICE Clear Europe ICE.N, LCH Limited which is owned by LSEG LSEG.L, and LME Clear Limited, owned by Hong Kong Exchange and Clearing 0388.HK, and will model the default of two or more members during a severe market stress.

The BoE said the test was "intended to represent extreme market moves over a period of two to five days in which there is escalating concern about fragmentation in global trade and sovereign debt risks".