Stronger defences needed: stress testing a eurozone break-up

Banks need more capital if they are to survive the worst eurozone scenarios being envisaged by some institutions, say Barry Schachter and Lance Smith

As the financial crisis in Europe deepened over the past 12 months, what had once been unthinkable became the subject of daily speculation: the departure of one or more countries from the euro, joint guarantee of individual sovereign debts, and default by a member of the European Union (EU).

The range of different outcomes is partly a product of the number of actors involved – ranging from the