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IMF – Germany: Technical Note on Stress Testing

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Germany: Technical Note on Stress Testing, December 2011. IMF Country Report No. 11/371

  • “This note summarizes the stress tests undertaken for the German banking system as part of the Financial Sector Assessment Program (FSAP) Update. Solvency tests for the German banking system assessed medium-term vulnerabilities under two adverse macroeconomic scenarios. The tests considered a variety of measures of soundness, and took into account funding costs, sovereign risk, upcoming changes in the regulatory rules, and behavioral changes of banks. The liquidity tests simulated a sudden withdrawal of funding sources, and the maturity mismatch of banks. Tables 1–3 provide an overview of the key elements of the stress tests. Both the solvency and liquidity stress tests were undertaken in close cooperation with the authorities, and using a framework that facilitates comparison with peer countries.”
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