So, while chronic stress is always bad for you, a short period of mild stress followed by a period of recovery can be good.

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For example, during a period of heightened stress, participants may be willing to provide liquidity to a market if a strong central counterparty is present but not otherwise.

FORBES: Transcript

In regards to leverage, Basel III introduced a minimum 3% leverage ratio and two required liquidity ratios: (1) the Liquidity Coverage Ratio, which requires a bank to hold high-quality liquid assets to cover its total net cash outflows over 30 days, and (2) the Net Stable Funding Ratio, which requires the available amount of stable funding to exceed the required amount of stable funding over a one-year period of extended stress.

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And earlier this year, a study found that when mice are subjected to stress over a period of time, they have more phosphorylated tau protein deposits in their brains (see this Scientific American blog for a nice synopsis).

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Unfortunately, a significant minority of traumatized people will suffer terribly and for an extended period as a result of developing post-traumatic stress disorder, or PTSD.

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As a result the FSA has opted to phase the new rules in gradually, over the course of several years, and has hinted that at the end of this period banks may need to hold only a portion of the extra liquidity required by the stress test.

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The credit crunch was a liquidity crisis, so in future, banks will have to be able to meet their liabilities for a period of at least 30 days in times of financial stress.

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So they subjected the rats to acute stressors (foot shocks, a novel environment, or being immobilized for a period of time), and then looked at their levels of stress hormones and their memory, days to weeks later.

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Next, we take action: I remind parents that food allergies are a proven source of stress, and I'm completely honest that the early adjustment period can be extremely difficult.

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