The European Banking Authority (EBA) has won praise for producing a "more demanding" adverse scenario for the forthcoming European Union (EU) stress test than in previous years, but analysts are raising concerns over its "optimistic" inflation outlook.
The scenario, released last week, will be used to test banks' ability to withstand a number of severe – and unlikely – macro-economic developments, including a seven percentage point drop in GDP over a three-year period.
Anatoli Annenkov, a senior
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