We provide a first evaluation of the quality of banking stress tests in the European Union. We use stress tests scenarios and banks' estimated losses to recover bank level exposures to macroeconomic factors. Once macro outcomes are realized, we predict banks' losses and compare them to actual...

The recent implementation of the Basel III framework has re-ignited the debate around the link between capital, performance and regulatory capital requirements in the banking sector. There is a dominant view in the earlier empirical literature in favor of a positive effect of capital on banking...

As part of the International Banking Research Network, the Banque de France contribution to the research project on liquidity risk transmission concentrates on the “outward” transmission of shocks affecting French banking groups. Using a rich dataset on their international positions, we...