Methods for stress tests of banks evaluated by researchers

Both the Riksbank and Finansinspektionen regularly conduct various forms of stress test on banks, and the methods used in these exercises are continually developed. To obtain assistance with the overall selection of methods for the Riksbank and Finansinspektionen's joint stress test of the banking system, the authorities have turned to two Austrian researchers, Martin Summer, Head of the Economic Studies Division at the Oesterreichische Nationalbank and Thomas Breuer, Professor at the University of Applied Sciences Vorarlberg.

Summer and Breuer have produced a report providing a comprehensive description of the different methods they consider are important for a modern stress test of banks' capital. The report can be downloaded via University of Applied Sciences Vorarlberg: Solvency stress testing of banks: Current practice and novel options.

The Riksbank and Finansinspektionen will take Breuer and Summer's conclusions into account in their ongoing work of further developing current methods of stress test on banking system.