Stress Tests Can Help Determine How Much Capital Central Banks Need

This article is published in association with IMF. Romain Veyrune Central banks pride themselves on being data-driven and consensus-based. Surprisingly, though, there is little consensus among policymakers on a crucial issue: how much capital should these institutions hold? Unlike commercial banks, central banks don’t have universally prescribed minimum capital requirements. They can’t go bankrupt, because they […]

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