Principles for Sound Stress Testing Practices and Supervision

Basel Committee on Banking Supervision. (2009). Principles for Sound Stress Testing Practices and Supervision.

Type

Report

Intellectual base

Grey literature

Year

2009

Link

https://www.bis.org/publ/bcbs155.htm

Cited from

military_strategic_studies

Cited by

4 citations across 4 artifacts.

Each citation links to the sentence it supports in the citing article.

Primes

• Wargaming
  • Policy and diplomacy: crisis simulations, Track II exercises, sanctions tabletops. Financial regulation: stress-testing scenarios where the adversarial element is a hostile market regime.

    This sourceEstablishes severe, forward-looking stress-testing scenarios in financial regulation.

Mechanisms

• Post-Windfall Stress Test
  • The named practice it draws on is reverse stress testing, which deliberately starts from the failure state and works back to the conditions that cause it, precisely so that only-survivable scenarios aren't the only ones examined.

    This sourceDefines reverse stress testing as starting from a known failure outcome and working backward to events that could cause it, including scenarios that threaten the firm's viability.

• Stress Test and Reverse Stress Test
  • Reverse testing is the structural guard against this

    This sourceUses reverse stress testing to search backward from viability-threatening outcomes and warns that dismissing remote events can obscure real vulnerabilities.

• Stress-Test Margin Check
  • The disciplines are to include coincident and correlated failures

    This sourceCalls for stress scenarios that combine correlated failures and are refreshed as risks and information change.

Verification

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Links previously used in the corpus

Before the registry existed this work was also linked 1 other way.

• https://www.bis.org/publ/bcbs155.pdf ×1

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