Placing EU banks under undue stress

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Series Details 2 December 2011
Publication Date 02/12/2011
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This Commentary surveys the latest round of stress tests administered to EU banks by the European Banking Authority (EBA) and finds their exclusive focus on a single measure of capital, the Tier 1 capital ratio of Basel III, short-sighted. While the first two stress tests underestimated the capital needs in the European banking system, the third test risks overestimating the picture in some cases.

Source Link Link to Main Source http://aei.pitt.edu/33005/2/KL_on_Bank_Stress_Test.pdf
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