Professor Viral Acharya's joint research and Professor Kim Schoenholtz's blog post on stress tests are featured
— August 11, 2016
Excerpt from Bloomberg -- "'While these banks may meet a weak regulatory test, as the more than 40 percent decline of bank equities over the past year implies, they do not meet the market test,' [Kim Schoenholtz and coauthor Stephen Cecchetti] write. This criticism is consistent with a new research paper published by academic economics Viral V. Acharya, Diane Pierret, and Sascha Steffen. Based on the disclosures made available by the EBA stress test, they estimate that European banks face a capital shortfall of 123 billion euros, when set against U.S. supervisory standards and a 4 percent leverage ratio — also known as a capital-to-asset ratio, a measure that determines how much capital a lender needs to set aside relative to the assets they hold."