The proposed guidance:
- Applies to banking organizations with consolidated total assets equal to or greater than $10 billion.
- Highlights four principles that should be part of a banking organizations stress testing framework. The framework should (1) include activities and exercises that are tailored to the activities of the organization; (2) employ multiple conceptually sound activities and approaches; (3) be forward-looking and flexible; and (4) be clear, actionable, well-supported, and used in the decision-making process.
- Emphasizes the importance of stress testing as a tool for assessing risk and addressing a range of potential adverse outcomes.
- Discusses four types of stress tests: scenario analysis; sensitivity analysis; enterprise-wide stress testing; and reverse stress testing.
- Notes that stress testing should be commensurate with an organizations size, complexity, and business profile.
- Discusses the importance of stress testing in capital and liquidity planning.
FDIC-Supervised Banks (Commercial and Savings)
Chief Executive Officer
Chief Financial Officer
Chief Risk Officer
Risk-Based Capital Rules
12 CFR Part 325
Proposed Guidance on Stress Testing for Banking Organizations with More Than $10 Billion in Total Consolidated Assets - PDF (PDF Help)
Karl Reitz, Senior Capital Markets Specialist, at firstname.lastname@example.org or (202) 898-6775
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