C73 - Stochastic and Dynamic Games; Evolutionary Games; Repeated Games

• From Stress to Strategy: How Banks Balance the Scales

  Staff working paper 2026-26 Ruben Hipp, Javier Ojea Ferreiro

  This paper develops a stress-testing framework in which banks strategically adjust their balance sheets in response to regulatory constraints and market conditions. Applied to Canada’s largest banks, it quantifies the effects of macroprudential policies on lending and identifies systemic vulnerabilities through reverse stress testing.

  Content Type(s): Staff research, Staff working papers JEL Code(s): C, C6, C63, C7, C73, G, G2, G21, G3, G32, H, H1, H12 Research Theme(s): Financial system, Financial institutions and intermediation, Financial stability and systemic risk, Models and tools, Economic models