How to Conduct a Stress Testing Program

How to Conduct a Stress Testing Program

A firm wide stress testing program should have the following elements:

• cover the different types of Stress Testing and their main objectives and applications
• establish the frequency of the different stress testing exercises
• specify the Internal Governance regime with clear responsibilities and procedures for the parties involved
• in case of a group of legal entities, the scope of the entities included and the coverage (e.g. risk types, asset portfolios) of the stress tests
• the methodological details, including any quantitative models used
• the range of assumptions, including business and managerial actions, and remedial actions envisaged for each stress test
• the relevant [Data Infrastructure]]