If the remuneration is too high and the bank cannot retain profits and use them to increase its capital to meet those demands, we impose restrictions. How can the market be convinced that the stress tests are useful if each bank’s results are not published and capital is not required?
Stress tests were created to provide supervisors and the public at large with information about the resilience of banks in certain hypothetical scenarios and are very useful in identifying vulnerabilities in banks. The solution to these weaknesses is sometimes but not always more capital.