Services 2

Stress Testing

Stress testing is now an ongoing necessity for the global financial system. The main purpose of the stress testing framework is to provide a forward-looking, quantitative assessment of the capital adequacy of the banking system as a whole and individual institutions within it.

Our approach utilises regulatory requirements and industry best practices for delivering stress testing models which are fully compliant, well-controlled and easy to be explained. We work closely with the client to:

  • Be fully compliant against ICAAP and IRB requirements
  • Compose a capital management plan and develop mitigating actions
  • Understand how capital and impairment losses fluctuate in response to recession/adverse events
  • Develop sound macroeconomic and business scenarios
  • Provide a check on the outputs and accuracy of risk models
  • Explore sensitivities in longer-term business plans
  • Influence risk appetite and adjust the business/risk profile where appropriate
  • Help the business understand the portfolio
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