The Comprehensive Assessment

Angelo Baglioni

Chapter Chapter 4 in The European Banking Union, 2016, pp 61-80 from Palgrave Macmillan

Abstract: Abstract The first important action taken by the ECB, as banking supervisor, has been the Comprehensive Assessment, where 130 banks have been examined through an AQR and a Stress Test. The main features and outcomes of this exercise are described in this chapter. The ECB’s methodology has raised some controversies, which are addressed here. The main criticism derives from its focus on the CET1 ratio as the only indicator of bank solvency; the CET1 ratio should be complemented with a simple leverage index, which is less prone to manipulations and national biases. The other main limitation is the micro-prudential approach; the inclusion of systemic risk into the adverse scenario may lead to a considerable improvement of the stress test methodology.

Keywords: Asset quality review; Stress test; Capital shortfall; Basel III (search for similar items in EconPapers)
Date: 2016
References: Add references at CitEc
Citations:

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:pal:pmschp:978-1-137-56314-9_4

Ordering information: This item can be ordered from
http://www.palgrave.com/9781137563149

DOI: 10.1057/978-1-137-56314-9_4

Access Statistics for this chapter

More chapters in Palgrave Macmillan Studies in Banking and Financial Institutions from Palgrave Macmillan
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().