How to Conduct a Stress Testing Program

A firm wide stress testing program should have the following elements^[1]:

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]]

References