Bank stress tests, financial stability and simulation of "feedback" effect

Show simple item record Garguláková, Monika Belás, Jaroslav 2013-07-08T08:08:06Z 2013-07-08T08:08:06Z 2012
dc.identifier Univerzitní knihovna (studovna)
dc.identifier.issn 1211-555X (Print)
dc.identifier.issn 1804-8048 (Online)
dc.description.abstract Stress testing is one of the main key quantitative tools for assessment of financial stability. In this process, the assets of banks are exposed to the stress of adverse effects of defined shocks derived from historical and hypothetical scenarios. The aim of stress testing is to verify the hypothetical whether the banking sector is sufficiently resistant to the potential effects of adverse shocks and whether it would not be a threat to financial stability in case of their realization. This article aims to present the current system of stress testing in the Czech Republic and to define the possible impact of selected scenarios for stress testing on the business of banks and capital adequacy. Banks stress testing may result in pro-cyclical behaviour of the banking sector, which under certain conditions may exhibit the reverse negative impact effect on the economy. In the article we use the basic methodology for calculating capital requirements for stress testing, adjusted by own scenarios of adverse shocks. Results of our research point to existing pro-cyclical relationship between regulatory rules and trading activities in the banking sector. Tightening of banking regulation creates conditions for a gradual reduction of the economy performance. eng
dc.format p. 51-63 eng
dc.language.iso eng
dc.publisher Univerzita Pardubice
dc.relation.ispartof Scientific papers of the University of Pardubice. Series D, Faculty of Economics and Administration. 24 (2/2012) eng
dc.rights open access eng
dc.subject financial stability eng
dc.subject banking regulation eng
dc.subject stress testing eng
dc.subject bank risks eng
dc.subject pro-cyclical behaviour eng
dc.title Bank stress tests, financial stability and simulation of "feedback" effect eng
dc.type Article
dc.identifier.signature 47940-24
dc.peerreviewed yes eng
dc.publicationstatus published eng

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