Język Polski
English
Published
:
2011-08-30
Bank Stress Tests and Their Role in Restoring the Confidence of Financial Markets
Janusz Cichy
Abstract
It is commonly believed that banks were the originators of the recent financial crisis, yet it is clear at the same time that the crisis caused them enormous losses. As a direct consequence, many of them went bankrupt or had to be rescued e.g. through generous injections of public money. In the case of banks, any financial difficulties bear immediately on the confidence of investors and customers. Therefore, regulators in the US and in Europe have designed tests which entail exposure to extreme conditions in order to examine a bank's vulnerability to a number of adverse macro-economic factors and developments. It is hoped that such tests will reveal a bank's true capital strength and thus help restore the confidence of financial markets. The paper aims to present the key concepts on which commercial bank stress tests are based and to assess the importance that positive test results may have for investors and bank customers.(original abstract)Keywords:
Financial crisis, Banks, Trust, Stress testsDetails
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Citation rules
Cichy, J. (2011). Bank Stress Tests and Their Role in Restoring the Confidence of Financial Markets. Zeszyty Naukowe Wyższej Szkoły Bankowej W Poznaniu, 35. Retrieved from https://journals.wsb.poznan.pl/index.php/znwsb/article/view/1435