Riksbank develops model to stress-test banks’ corporate lending
New model is based on microdata on all Swedish non-financial corporations
Sveriges Riksbank has developed a model to carry out stress tests on Swedish banks’ corporate lending.
The model is based on microdata on all Swedish non-financial corporations and their loans with Swedish banks. The central bank highlights how using microdata rather than aggregate data allows users to identify specific characteristics at the company level.
“The estimated models are very robust due to the millions of observations in the dataset,” says the Riksbank. Nonetheless, the central
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