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What is Assessing Condado about?

The document discusses the stress-testing framework of the Central Bank of Condado. It assesses using a top-down versus bottom-up approach given there are only three banks in the country. While a top-down approach provides easily understandable outputs, it may not accurately capture risks since the banks have different business models. A bottom-up approach is better at identifying individual bank risks but requires more data. Given the small number of banks, a bottom-up approach may be feasible for the Cent

Author

Thue Klit Søndergaard

Language

EN