2023 macroprudential stress test of the euro area banking system

Giuseppe Cappelletti, Ivan Dimitrov, Laurynas Naruševičius, Catherine Le Grand, André Nunes, Jure Podlogar, Nicola Röhm and Lucas Ter Steege

No 347, Occasional Paper Series from European Central Bank

Abstract: This paper presents the updated macroprudential stress test for the euro area banking system, comprising around 100 of the largest euro area credit institutions across 19 countries. The approach involves modelling banks’ reactions to changing economic conditions. It also examines the effects of adverse scenarios as defined for the European Banking Authority’s 2023 stress test on economies and the financial system as a whole by acknowledging a broad set of interactions and interdependencies between banks, other market participants and the real economy. Our results highlight the resilience of the euro area banking system and the important role banks’ adjustments play in the propagation of shocks to the financial sector and real economy. JEL Classification: C30, C53, C54, E52

Keywords: economic models; forecasting; macroeconometrics; monetary policy (search for similar items in EconPapers)
Date: 2024-05
New Economics Papers: this item is included in nep-ban, nep-cba, nep-eec and nep-mon
Note: 2772546
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Persistent link: https://EconPapers.repec.org/RePEc:ecb:ecbops:2024347

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