Market reactions to the ECB's Comprehensive Assessment

- Stock and CDS markets' reactions are assessed using an event study methodology.
- Both markets generally did not react to the publication of the results.
- Stress tests remain an important supervisory tool for additional market transparency.

Using an event study approach, we examine financial markets' reactions to the publication of the ECB's Comprehensive Assessment of banks in the euro area. Our results suggest that banks' stock market prices and CDS spreads generally showed no reaction.