And we expect firms to continue to do this and maintain high levels of prudence in the face of continuing high uncertainty.6 Stress testing: 2021 and beyond In the near future we have two more stress tests coming up using a common scenario: (1) The Bank of England will be using the 2021 biennial exploratory scenario (BES) to explore the financial risks posed by climate change. The exercise aims to test the resilience of the current business models of the  5 6  See Insurance Stress Test 2019: Feedback for general and life insurers (June 2020). See Letter from Sam Woods to insurers on distribution of profits (March 2020). 4  All speeches are available online at www.bankofengland.co.uk/news/speeches and @BoE_PressOffice  4  largest banks, insurers, and the financial system to climate related risks – as well as the scale of adjustment that will need to be undertaken in coming decades for the system to remain resilient. Conducting a climate stress test poses distinct challenges compared to conventional macro-financial or insurance stress tests. The Bank is using feedback from last year’s discussion paper to ensure it is effective and that the design is appropriate.7 We are having further engagement with financial firms, climate scientists, economists, other industry experts, and informed stakeholder groups to support this work. We will publish scenarios in June 2021, with initial submissions due by the end of September. Given this time frame we would encourage firms to start developing their capabilities sooner rather than later.
Ratios of household debt and post-tax interest expenditure to disposable income (per cent)  debt ratio (lhs)  mar-06  mar-05  mar-04  mar-03  mar-02  mar-01  mar-00  mar-99  mar-98  mar-97  mar-96  mar-95  mar-94  mar-93  mar-92  mar-91  mar-90  mar-89  mar-88  mar-87  0 mar-86  0 mar-85  2  mar-84  20  mar-83  4  mar-82  40  mar-81  6  mar-80  60  mar-79  8  mar-78  80  mar-77  10  mar-76  100  mar-75  12  mar-74  120  mar-73  14  mar-72  140  mar-71  16  mar-70  160  interest ratio (rhs)  Sources: Statistics Sweden and the Riksbank  8  BIS Review 105/2006