A triple stress test for Europe

During the global financial crisis of 2007-9, the US government and the Federal Reserve subjected US banks to a stress test. The idea was to test banks in severe - but hypothetical - recession scenarios in which they would have to show they were adequately capitalized, thereby restoring the confidence of depositors and investors. In his memoirs, Barack Obama talks at length about this risky tactic, which was nevertheless successful and helped stabilize the US financial system and the US economy in general.

EU authorities followed the same tactics with similar stress tests on European banks during the eurozone crisis, as we did in Greece at the beginning of our crisis. I remember the anxiety at the time - in an environment of capital flight from the country - that Greek banks would pass the test successfully; they did, and that helped to avoid a bank run in the first period...