European Central Bank outlines three models underpinning macro-prudential analysis
Models look at capital requirements, household finances and bank vulnerabilities
The European Central Bank (ECB) has issued the its first of its biannual ‘Macroprudential Bulletins' for 2016, giving details of several new models it is using to monitor the eurozone economy.
One model assesses the effect of changing capital requirements for banks on the economies of countries within the single supervisory mechanism (SSM) area. It builds on work by Clerc et al published in May 2015. That model introduces financial intermediation and three levels of default into a dynamic
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