Germany: Technical Note on Stress Testing

Author: International Monetary Fund

Volume/Issue: Volume 2011 Issue 371

Publication date: December 2011

ISBN: 9781463928568

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Topics covered in this book

This title contains information about the following subjects. Click on a subject if you would like to see other titles with the same subjects.

Banks and Banking , Finance , Economics- Macroeconomics , ISCR , CR , bank , capital ratio , capital , Tier 1 , put option , debt holder , Grouping bank , banking system , percentage share , bank liability , large bank , conservation buffer , bank's CDS , sensitivity analysis , credit risk , Stress testing , Basel III , Systemic risk , Capital adequacy requirements , Personal income , Global

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Summary

This note summarizes the stress tests undertaken for the German banking system as part of the Financial Sector Assessment Program (FSAP) update. Solvency tests for the German banking system assessed medium-term vulnerabilities under two adverse macroeconomic scenarios. The tests considered a variety of measures of soundness, and took into account funding costs, sovereign risk, upcoming changes in the regulatory rules, and behavioral changes of banks. The test results revealed that German banks are robust against many shocks, and that important vulnerabilities still remain.