IMF paper offers more granular stress testing framework
A stress testing framework that accounts for banks' heterogeneous reactions to shocks could be used to more "efficiently" survey the financial system, a working paper published by the International Monetary Fund has suggested.
In their paper, Francesco Grigoli, Mario Mansilla and Martín Saldías apply a stress testing framework of credit risk to Ecuador's financial sector to analyse macro-financial linkages and what impact they would have on non-performing loans (NPLs). They allow banks to make
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