Wed Feb 5 CET - Thu Feb 6 CET (almost 2 years ago)
In your timezone (EST): Wed Feb 5 2:00am - Thu Feb 6 11:00am
Financial sector stress tests have, since the onset of the financial crisis, proved to be an important tool for assessing the robustness of the financial system and gauging risks arising at a system-wide level from a macroprudential perspective. Macroprudential stress-testing frameworks are now also used to calibrate and assess the impact of macroprudential policy instruments. In this context, macroprudential stress tests first need to adopt a dynamic approach that takes account of banks’ behavioural responses to the relevant scenarios. Second, they have to take account of the two-way interaction between banks and the real economy. And third, they need to account for the interconnectedness of institutions and related contagion effects, which can amplify the initial stress.
As a result of these developments, stress testing as a discipline has become increasingly important for economic policy and research. In order to support research relating to macroprudential stress testing, the European Central Bank will hold its first Macroprudential Stress Testing Conference.