A Structure of Analysis through Stress Testing

Dimitris N. Chorafas

Chapter 8 in Financial Cycles, 2015, pp 153-174 from Palgrave Macmillan

Abstract: Abstract Large and complex banking groups are facing new demands to prove their soundness, after central bankers expressed concerns over their exposure and their leverage. On June 20, 2014, the Bank of England’s regulatory arm—the Prudential Regulatory Authority (PRA)—announced that both Barclays and Nationwide Building Society had fallen short of a 3 percent leverage ratio, which expresses capital as a proportion of total assets. Adjusting for projected risks, Barclays’ leverage ratio was only 2.5 percent, while Nationwide’s was just 2 percent.

Keywords: Stress Test; Credit Risk; Expected Loss; Financial Cycle; Leverage Ratio (search for similar items in EconPapers)
Date: 2015
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Persistent link: https://EconPapers.repec.org/RePEc:pal:palchp:978-1-137-49798-7_8

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DOI: 10.1057/9781137497987_8

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