THE STRESS TEST - A NEW CHALLENGE FOR THE BANKING UNION

Lucian Ciprian Crisan (lucianciprian.crisan@yahoo.ro)
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Lucian Ciprian Crisan: Faculty of Economics and Business Administration

No 702690, Proceedings of International Academic Conferences from International Institute of Social and Economic Sciences

Abstract: Stress testing has become an essential and very prominent tool in the analysis of financial sector stability and development of financial sector policy. Starting with 2010 stress test led by the Committee of European Banking Supervisors (CEBS), and reinforced by 2011 stress test and the bank recapitalization exercise led by the European Banking Authority (EBA), the output of EU wide stress tests has been viewed as essential information on the health of the system.The purpose of this paper is to highlight the main elements considered by the EBA and European Central Bank (ECB) in creating the model of the stress test. At the same time it will highlight how the recent financial crisis has influenced the introduction of these decisions in order to stabilize the banking system. The vision of a future banking union will reshape and resize the entire European system profile. Applying stress test will lead to a healthy and robust banking system even if a new potential crises will come.

Keywords: Banking Union; Stress test; financial crisis; Challenge; Basel philosophy (search for similar items in EconPapers)
JEL-codes: E60 F50 (search for similar items in EconPapers)
Pages: 6 pages
Date: 2014-10
New Economics Papers: this item is included in nep-ban, nep-cba and nep-mac
References: View references in EconPapers View complete reference list from CitEc
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Published in Proceedings of the Proceedings of the 12th International Academic Conference, Prague, Oct 2014, pages 255-260

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Persistent link: https://EconPapers.repec.org/RePEc:sek:iacpro:0702690

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