# Professor Viral Acharya's joint research and Professor Kim Schoenholtz's blog post on stress tests are featured

1 Faculty News August 11, 2016 ![Bloomberg logo](/sites/default/files/styles/246w/public/assets/images/bloomberg192x144.jpg?itok=yV529lwz)>

Excerpt from [Bloomberg](http://www.bloomberg.com/news/articles/2016-08-11/european-bank-stress-tests-get-more-stressful-when-you-make-them-american) -- "'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,' \[[Kim Schoenholtz](http://www.stern.nyu.edu/faculty/bio/kim-schoenholtz) and coauthor Stephen Cecchetti\] write. This criticism is consistent with a new research paper published by academic economics [Viral V. Acharya](http://www.stern.nyu.edu/faculty/bio/viral-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."

[Read more](http://www.bloomberg.com/news/articles/2016-08-11/european-bank-stress-tests-get-more-stressful-when-you-make-them-american)