Footnote:
Nach Informationen von SSRN wurde die ursprüngliche Fassung des Dokuments June 18, 2020 erstellt
Description:
Stress tests can affect banks' lending behavior. Since regulators care about lending, banks' reactions affect the test's design and create a feedback loop. We demonstrate that there may be multiple equilibria due to strategic complementarity, possibly leading to excess default or insufficient lending to the real economy. The stress tests may be too soft or too tough. Banking supervision exams have similar properties. When the recapitalization of banks becomes more difficult, stress tests are less informative. However, when a bank is more systemic, the stress test will be more informative