We present a novel approach that incorporates individual entity stress testing and losses from systemic risk effects (SE losses) into macroprudential stress testing. SE losses are measured using a reduced-form model to value financial entity assets, conditional on macroeconomic stress and the...

I study central supervision of local financial regulators in an economic union. Regulators each privately observe benefits from lenient local macroprudential policies. Separate deposit insurance funds allow no discretion to set policies because, with integrated financial markets, regulators...

In recent years, the question of how to prevent another crippling re-cession has become a prominent one. The answer provided by the Dodd-Frank Act is stress testing, which examines through economic models how banks would react to a bad turn of economic events, such as negative interest rates....

The present paper contains a brief presentation and analysis, in a historical perspective through the lens of the recent major crises, of the legal framework governing the European Economic and Monetary Union (EMU), as well as current developments and challenges ahead. It is structured in three...

From the perspective of financial network stability analysis achieved by studying the network formed with linkages of individual financial institutes, this article aims to delve into the monitoring, warning, and analyzing of the systematic risk of the financial system as a whole, which is the...

This article examines the potential efficacy of macro-prudential financial regulation as a mechanism for preventing future systemic crises. I argue that the potential efficacy of macro-prudential financial regulation will be undermined by (1) the complexity of financial markets and our...