This paper investigates the impact of regulatory stress test framework in the European Union on the banks conduct and portfolio adjustments. Our findings suggest that the banks subject to regulatory stress testing tend to structure their portfolios with lower risk density. However this does not...

We examine whether examiners were informed and contributed to the health of the banking sector. Information included quantitative information that was eventually made public, quantitative information that remained private, and subjective information dependent on the examiner's production of...