Best Practices of Business- Specific Stress Testing: Advice From the Front Lines of Bank Risk Management

When bank management takes a “check the box” approach to stress testing that focuses exclu­sively on compliance, they miss out on important opportunities to better understand the strengths and weaknesses of their business.

The usefulness of business-specific stress testing depends heavily on how bank staff identify key risks and scenarios, how stake­holders interact, and how they use risk insights to affect and make changes to their firm.

This white paper, which is the second in a two part series, explores best practices gathered from banks that are successfully using bank-specific stress tests to run their business smarter, safer and more profitably.