But let me focus on one key aspect, namely the importance of top-down models in the context of the European prudential stress tests. I believe the top-down model challenge, which has so far taken the form of a dialogue between supervisors and banks, could play a greater role in disciplining banks and reducing the incentives for them to systematically underestimate their vulnerabilities.
PwC deserves commendation for producing this document consistently over the last ten years. I am told that investors have found it a useful source of information for making investment decisions; and in deciding which banks they should do business with. The methodology analyzes the published financial statements of banks (i.e.