Principles for sound stress testing
A new consultative paper from the Basel Committee on Banking Supervision presents sound principles for the governance, design and implementation of stress testing programmes at banks.
The paper says that a sound stress testing programme should:
be directed by the board and senior management, provide forward-looking assessments of risk, complement information from models and historical data, be an integral part of capital and liquidity planning, guide the setting of a bank's risk tolerance, and fOnly users who have a paid subscription or are part of a corporate subscription are able to print or copy content.
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