IMF Staff Country Reports

European Union: Publication of Financial Sector Assessment Program Documentation—Technical Note on Stress Testing of Banks

Publication Date:

March 15, 2013

Electronic Access:

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Summary:

This article summarizes the European Union’s stress testing exercises and future priorities. The 2011 solvency stress testing was marked by methodology and data. The exercise forced banks to increase the quality and quantity of capitalization. This test has many controversial issues, but the benefits of this bold approach overshadow the risks. Several stress testing exercises have filled the pages of literature; an additional stress test is reviewed here.

Series:

Country Report No. 2013/068

Subject:

Banking External balance assessment (EBA) External position Financial sector policy and analysis Financial statements Liquidity stress testing Public financial management (PFM) Solvency stress testing Stress testing