Stress Tests to Promote Financial Stability: Assessing Progress and Looking to the Future

Rick Bookstaber (), Jill Cetina (), Greg Feldberg (), Mark Flood and Paul Glasserman ()
Additional contact information
Rick Bookstaber: Office of Financial Research
Jill Cetina: Office of Financial Research
Greg Feldberg: Office of Financial Research
Paul Glasserman: Columbia Business School, Columbia University

No 13-07, Working Papers from Office of Financial Research, US Department of the Treasury

Abstract: Stress testing, which has its roots in risk management, should be adapted to support financial stability monitoring and to incorporate the interconnections and dynamics of the financial system. Since the 2008 financial crisis, bank supervisors have honed their financial stability monitoring tools and significantly expanded the use of stress testing in the supervision of the largest financial institutions. This article describes areas in which further research could contribute to the development of best practices in stress testing and how bank supervisory stress tests can be made more useful for macroprudential supervision. We discuss both near-term and longer-term objectives.

Keywords: Stress Tests; Financial Stability (search for similar items in EconPapers)
Pages: 13 pages
Date: 2013-07-18
New Economics Papers: this item is included in nep-ban, nep-cba and nep-rmg
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Citations: View citations in EconPapers (8)

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Journal Article: Stress tests to promote financial stability: Assessing progress and looking to the future (2013)
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