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Stress Test
(redirected from stress tests)

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Stress test
Tests conducted by federal supervisory agencies in early 2009 to estimate the range of possible future losses among US banks and determine if they have sufficient capital buffers to withstand the impact of a severe recession. The stress test involved two scenarios, a base scenario and a worst case scenario.

Stress Test
A simulation measuring the capital adequacy of a bank. A government conducts a stress test to attempt to ensure that a bank can remain solvent in a crisis. The term came to prominence in 2009 and 2010 when the U.S. Treasury conducted stress tests of bailed out banks before it allowed them to repay Treasury loans.


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The test will be much more sophisticated than stress tests already undertaken by some domestic banks according to the requirement of Basel II Capital Accord.
There's a question of whether you can trust stress tests," Stiglitz said at an event in Dublin, according to Bloomberg.
Stress tests on 22 banks in the crisis-hit EU have shown the lenders are "sufficiently capitalised," the bloc's Swedish presidency said on Thursday.
 
 
 
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