Macroprudential stress tests have been employed by regulators in the United States and Europe to assess and address the solvency condition of financial firms in adverse macroeconomic scenarios. We provide a test of these stress tests by comparing their risk assessments and outcomes to those from...

The actual economic and financial turmoil calls for new bailout policies to enable the governments to rescue the banking sector and contrast the crisis. The successful past reforms undergone in the International Monetary Fund to access funds in exceptional situations are the base to identify the...