International analysis of post-crisis banking: the stress tests

Abstract

The main goal of the stress tests taken by the banking is to evaluate the resistance they have against some hypothetical scenarios. Although these tests had existed for decades as internal controls, after the financial crisis in 2008, they have become tools of external monitoring. They have focused not only in evaluating the stress but also in recovering the lost confidence in the banking sector caused by the economic recession. In addition, investors and analysts of the financial markets use these kind of tests to get aware of the situation of the bank entities. Regarding the mentioned above, this essay focuses on analysing if the banking sector shows differences between the years 2010 and 2015 concerning both the values of these tests, which predict the needs and excesses of capital, and a series of banking ratios calculated from their financial statements.