For example, the Expert Commission for Research and Innovation (EFI) recently complained that new ideas and ﬁndings from universities and non-university research institutions are often not being utilised. [30] The OECD also recommends that Germany boost its investment in knowledge-based capital and increases its access to later-stage venture capital. [31] Going forward, innovative power will be particularly crucial in order to overcome the major challenges our economy and society faces, including the transfer to a climate-neutral economy, demographic change and digitalisation with all the opportunities and risks it entails.
It also provide banks’ management with a tool to improve their internal risk managements by identifying the stress points in their operations. The relevance of stress tests for assessing banks’ resilience to shocks lies in the fact that these tests focus on the unexpected or “tail” events going beyond typical risk management assessments which focus on events within the “three sigma” doubled interval.