The reasons for the economic slowdown in the EU are manifold, and the Lisbon Agenda underlines the need for a multi-faceted approach. One of the main goals of the Agenda is to foster financial integration in the EU. Indeed, research expects financial integration to be associated with a quantitatively significant “growth dividend”.
In particular, I will focus on two key facets of this evolution – the more integral use of the top-down review process and the advantages of adding a macroprudential perspective. Current stress test methodology in Europe The EU-wide stress tests involve significant input from the banks, following a so-called constrained bottom-up approach.