The recent financial crisis has forced a rethink of banking regulation and supervision and the role of financial innovation. This paper develops a model where prudent banks may signal their type through high capital ratios. Capital regulation may ensure separation in equilibrium, but deposit...

This European Central Bank (ECB) publication - Stress Test Analytics for Macroprudential Purposes in the euro area (STAMP€) - offers a suite of analytical tools for those interested in stress-testing frameworks and has been developed by ECB staff over the past few years.

Macroprudential policy can comprise a broad range of issues and topics. This is clearly reflected in the second issue of the ECB's Macroprudential Bulletin. The Bulletin starts with the macroprudential effects of the EU-wide bank stress testing exercise. The first chapter of the Bulletin...