Download This PaperStress Testing Banks: An International Comparison
44 Pages Posted: 24 Feb 2017
Date Written: September 30, 2016
Abstract
In the aftermath of the great financial crisis, the financial supervision changed its focus from micro to macroprudential. Matching the key features of each procedure so far conducted with the review of the analyses concerning the market reactions caused by their disclosure we find that stress tests can sooth panic and restore market confidence only when conducted during crisis period, built on severe yet plausible scenarios and accompanied with a credible institutional recapitalization mechanism.
Keywords: Stress Tests, Macroprudential Supervision, Market Reaction
JEL Classification: G01, G14, G28
Suggested Citation: Suggested Citation
Vena, Luigi, Stress Testing Banks: An International Comparison (September 30, 2016). Available at SSRN: https://ssrn.com/abstract=2922538 or http://dx.doi.org/10.2139/ssrn.2922538
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