Vox eBooks
Stress Testing and Macroprudential Regulation: A Transatlantic Assessment
Since the onset of the Global Crisis in 2007-08, stress testing has emerged as a major component of the supervisory toolkit. For most of the large global banks in the US and Europe, meeting the standards to pass their annual supervisory stress tests is the binding regulatory constraint. So the outcome of banks' stress tests is headline news these days. This has been a remarkable development for a tool which ten years ago was little known, apart from amongst a small fraternity of banks' risk modellers and their supervisory counterparts. This volume collects the contributions of a group of policymakers, academics and specialists in stress test design, from both sides of the Atlantic, who discussed stress testing experiences and methodologies during a two-day conference at the London School of Economics. It presents the current state of the art of stress testing for bank supervision and macroprudential regulation, and it serves as a useful guide to the frontier issues that the next generation of stress tests needs to address.
