Stress tests need macro-prudential focus, say central bankers
Tests should link banks and the real economy, say the ECB's Constancio and the BoE's Brazier
Regulatory stress tests of banks must become more sophisticated, according to senior UK and European central bankers who call for a closer focus on the macroeconomic effects of adverse scenarios and banks' responses to them.
Speaking at a conference organised by the Systemic Risk Centre, based at the London School of Economics and Political Science, Vitor Constancio, vice-president of the European Central Bank (ECB), praised the post-crisis spread of stress testing as a regulatory tool, but said
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