Such top-down macro stress-tests should be conducted with the view to complement and cross-check the results of bottom-up tests and assess, in particular, how the identified risks should be prioritised – a task which has been formally entrusted to the ESRB.
Challenges are substantial, but progress is being made with a view to constructing robust models to cover and replicate interlinkages within the financial sector and ascertaining how they may be activated and play out under conditions of stress.