Stress test


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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.
References in periodicals archive ?
There are published recommendations and appropriate use criteria for specific types of cardiac stress tests [7-10]; however, there is no consensus or recommendation about which the modality of cardiac stress test to choose preoperatively.
In 2000, CGFS (Committee on the Global Financial System) to discuss the general pressure test (aggregate stress test) the potential use and interpretation of the concept of overall stress testing, stress testing is a general method of risk measurement of a group of financial institutions in the face of a specific scenario when exposed to [2].
A bank stress test is a simulation based on an examination of the balance sheet of that institution.
Separately, the ECB conducted in parallel a stress test of an additional 56 banks under its direct supervision, using the same methodology.
RCB is not in the list of 51 EU banks for which the European Banking Authority (EBA) conducted the stress tests.
(c) To provide stylised numerical examples of Islamic financial institution stress tests under different shock scenarios.
Twenty-five banks then failed the stress test with a combined shortfall of 25 billion [euro].
The guidance confirms that companies with assets between $10 billion and $50 billion are not subject to the Fed's capital plan rule, the Fed's annual Comprehensive Capital Analysis and Review, Dodd-Frank Act supervisory stress tests, or related data collections.
* The NCUA's stress test would supersede a credit union's test results.
The ACLI is also concerned about public disclosure of stress test results of a nonbank-covered company's (i.e.
''I cannot help but suspect there are problems in the entire quality of the (stress test) operations at TEPCO,'' Edano told reporters, adding that the number of errors in the utility's report it submitted to the Nuclear and Industrial Safety Agency earlier was incomparably high compared with other cases.