Runs Versus Lemons: Why US Bank Stress Tests Succeeded While Europe’s Failed
— July 22, 2015
By Thomas Philippon, Miguel Faria-e-Castro and Joseba Martinez
Taking their supervisory duties an unprecedented step further, regulators would reveal to the public detailed bank-by-bank results of a thorough inspection of balance sheets – outing weak banks as such and endorsing the strength of sound ones.
With this information, it was hoped, investors would regain their willingness to invest in US financial institutions. And so it proved.
Read full article as published in The Conversation
Thomas Philippon is a Professor of Finance.