IMF makes clear no corners have been turned
They looked at the capital needs of the banks under a variety of scenarios, and in effect looked at how much additional capital would be needed. Under the ‘adverse’ scenario identified by Blackrock, the banks were expected to lose an additional €43bn; under the ‘base’ scenario, they would lose another €29.5bn. The ‘base’ scenario was the one that was and is used.
Deviation from this towards or through the ‘adverse’ or ‘stressed’ scenario raises the spectre of future capital calls from the banks. To this must be added the new normal — that deposits are to be seen as potentially in play where the banks’ capital needs emerge.
