Stress Testing (redirected from stress)

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.