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 ?
FSAP embedded in the financial stability framework, will be a combination of macro Prudential stress testing and micro Prudential stress testing, while carrying out the bottom-up and top- down stress tests.
65bn worth of foreign assets to its parent company, Criteria Holding, in March, it could not quote the sale for its benefit in the stress test.
Separately, the ECB conducted in parallel a stress test of an additional 56 banks under its direct supervision, using the same methodology.
The first point to appreciate is that central bank stress tests are based on models of financial risk--models that predict potential losses and their associated probabilities--and these models are not so much useless as worse than useless.
Among them, nuclear stress tests expose patients to radiation, which, with cumulative radiation doses, raises a person's risk of cancer.
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.
The IAEA mission came at a time when some local governments hosting nuclear power plants as well as experts have criticized the stress tests as they do not reflect the findings of the government's investigation team, which is still probing the Fukushima nuclear crisis.
Given the uncertainty in the near future environment, now is the time to stress test your P&L, or scenario test your annual plan or project.
The banking regulator has announced that it would launch a new round of stress tests to assess property loans.
Stress tests are used by commercial financial institutions, regulators and central banks as a means of testing the resilience of institutions or the entire sector to adverse changes in the economic environment.
Stress tests are for example used to estimate capital needs under Pillar 2.