Stress Testing


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Stress Testing

A process, usually computerized, that evaluates an institution's reaction to different situations. Specifically, stress testing measures whether the institution has adequate capital and/or assets to respond effectively to various, adverse scenarios presented by the computer program. Stress testing became particularly important in the United States in the spring of 2009 when Treasury Secretary Timothy Geithner conducted a series on troubled American financial institutions to determine which were able to raise private capital and could therefore begin repaying TARP funds extended the previous year.
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For banks that are part of a conglomerate or a group structure, stress testing exercises should be on consolidated basis or at the parent bank's level.
With the outbreak of the financial crisis and crisis recovery in 2008 after the advance of macro stress testing is widely regarded as a new tool of effective management and solve the crisis, to guide bank restructuring, promote the recovery in confidence in the financial system role.
The inescapable conclusion is that the methodology of regulatory stress testing is based on foundations that are indefensible and even risible.
Additionally, the proposed rule on stress testing is put forth by the agency even though the NCUA is aware that the largest credit unions already conduct stress testing on their own," he said.
Although the issue is not specifically raised in the policy statement, "we have similar concerns should the board consider applying the stress testing framework as outlined in the policy statement to any savings and loan holding company (SLHC) that is primarily a life insurance enterprise," the letter stated.
The Board, along with the Office of the Comptroller of the Currency and the Federal Deposit Insurance Corporation, noted that these initiatives "are raising some questions on the part of community bankers regarding supervisory expectations for stress testing.
In a prospective series of 120 consecutive patients referred for pharmacologic myocardial perfusion imaging stress testing by primary care physicians, surgeons, and cardiologists, 60% of patients were able to mount the treadmill and exercise to 85% of their estimated maximum heart rate, Dr.
Here's what can happen as a result: In a prospective series of 120 consecutive patients referred for pharmacologic myocardial perfusion imaging stress testing by primary care physicians, surgeons, and cardiologists, 60% of the patients were able to mount the treadmill and exercise to 85% of their estimated maximum heart rate, he reported at the meeting.
To illustrate our point we present the results of the verification of the Czech National Bank's (CNB) stress testing framework.
Stress testing has been part of many banks' internal risk assessment since the early 1990s and was also adopted at an early stage by Norwegian banks.
This stress test complements the risk management procedures and regular stress testing programmes set up in Marfin Popular Bank Public Co Ltd under the Pillar 2 framework of the Basel II and CRD1 requirements.
The Stress Testing Techniques in Credit, Liquidity and Interest Rate Risk in Banks seminar is supported by the Central Bank of Bahrain (CBB) and was opened with a keynote address by CBB director of retail banking supervision directorate Yousif Hassan where he discussed the importance of stress testing and the central bank's role in applying this initiative.