The stress test exercises are important inputs for the ECB’s Supervisory Review and Evaluation Process (SREP)[4] and provide valuable insights for broader financial stability analyses based on granular information. [5] Over the last five years, cooperation between micro- and macroprudential authorities has increased in all phases of the stress-testing process.
Today, micro- and macroprudential supervision complement each other by building on their respective knowledge of the banking system to provide a sound and credible assessment of banks’ resilience to stress. For instance, during the preparatory phase, supervisors and regulators discuss in detail the stress test methodology and the calibration of the adverse scenario.