The newly released stress test of selected EU-area banks by the Committee of European Bank Supervisors (CEBS) is flawed in its methodology and the results are not a reliable indicator of EU bank sector soundness. A stress test should examine the impact on net portfolio value of extreme but plausible shocks to the key variates explaining net portfolio value. The CEBS report states proudly and repeatedly that it uses extreme but plausible shocks, and this is true, but it ignores the key-variates criterion of a well-designed stress test.
Author: Gregory Connor
Morgan Kelly has published a downbeat assessment of Ireland’s prospects for debt stabilisation in today’s Irish Times. As part of this, he provides a very powerful indictment of the Irish bank loan guarantee and Anglo bailout.
There is still one day left to late-register for the upcoming conference, “Regulating Financial Market Liquidity and Stability,” taking place tomorrow, Friday, May 14th , 5 pm – 7 pm, at the Irish Institute of Bankers in the IFSC. The recent chaotic response of EU policymakers to the Greek debt crisis highlights the importance of the conference’s theme.
REGISTRATION: The event is free, but delegates must pre-register by emailing Irene Moore (irene.moore@ucd.ie), by the end of the day today (Thursday 13th May).
Registration begins at 4:45 p.m. and the talks begin promptly at 5 p.m. (You must register and pick up a name tag in order to enter the Institute of Bankers hall.)
There are a variety of perspectives on the EU bailout of Greek sovereigns, but from the perspective of an academic economist (at least this one) the proposed bailout has some potential flaws that are quite fundamental.
See below for details of an upcoming conference, “Regulating Financial Market Liquidity and Stability,” taking place on Friday, May 14th , 5 pm – 7 pm, at the Irish Institute of Bankers in the IFSC. This is an outreach event intended for a mixed audience of practitioners, regulators and academics. This blog’s noted contributor Karl Whelan will be speaking, along with Roland Meeks of the Bank of England, and Robert Korajczyk of Northwestern University. REGISTRATION: The event is free, but delegates must register by emailing Irene Moore (irene.moore@ucd.ie), as soon as possible or by Friday 7th May at the latest.