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

March 15, 2013

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.

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

Keywords: balance sheet, bank, capital plan, capitalization level, cash flow, CR, ECB liquidity provision, Europe, External balance assessment (EBA), Financial statements, ISCR, Liquidity stress testing, recapitalization exercise, recovery plan, solvency stress, Solvency stress testing, Stress testing

Pages:
32
Volume:
2013
DOI:
https://doi.org/10.5089/9781475533408.002
Issue:
068
Series:
Country Report No. 2013/068
Stock No:
1EUREA2013004
ISBN:
9781475533408
ISSN:
1934-7685

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