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.

We investigate the consequences of overleveraging and the potential for destabilizing effects from financial- and real-sector interactions. In a theoretical framework, we model overleveraging and indicate how a highly leveraged banking system can lead to unstable dynamics and downward spirals....