Britain's Co-operative Bank to fail Bank of England stress test: Times

The eight banks are being tested on their ability to withstand a theoretical 35 percent crash in house prices and surging unemployment and interest rates, with the central bank's Prudential Regulation Authority due to announce the results on Dec. 16.

The Co-op bank is thought to have acknowledged that it has insufficient buffers to withstand a very severe recession, in spite of building 1.9 billion pounds ($2.97 billion) in extra capital in the past 12 months, the newspaper said.

The bank nearly collapsed last year and fell under the control of bondholders when a 1.5 billion pound capital shortfall was identified shortly after the collapse of its attempt to buy 631 branches from rival Lloyds .

(Reporting by Huw Jones; Editing by David Goodman)