Stress Testing
What is Stress Testing?
The simulation of extreme but plausible scenarios to evaluate an organization's ability to withstand significant adverse events and maintain operations.
Terms that appear alongside stress testing
Each of these is named in at least one of the same controls as stress testing. The number is how many controls name both.
- governance 6 shared controls
- cybersecurity 4 shared controls
- resilience 3 shared controls
- audit 3 shared controls
- accountability 3 shared controls
- scenario analysis 3 shared controls
- compliance 3 shared controls
- integrity 2 shared controls
Frameworks that govern stress testing
What the standards actually require on stress testing
Requirements naming stress testing across 6 standards, quoted from the control text.
The risk management framework must include forward looking scenario analysis and stress testing programs proportionate to the size, business mix and complexity of the institution and built on severe but plausible assumptions.
CPS220-14 · Scenario Analysis and Stress Testing Programs →Requires the Commission, supported by the Board, to monitor critical raw material supply chains, identify supply risks and disruptions, and perform regular stress tests on the supply chains of strategic raw materials.
CRMA-Art.20 · Monitoring and stress testing →Conduct rigorous, forward-looking stress testing that identifies severe events or changes in market conditions that could adversely affect the bank, feeding capital and liquidity planning.
BASEL3-SRP-4 · Supervisory Stress Testing →HKMA SPM Corporate Governance + Internal Control + Auditing modules. CG CORPORATE GOVERNANCE MODULES: (1) CG-1 Corporate Governance of Locally Incorporated AIs - board composition + independent directors + executive accountability + governance structure + fitn...
HKMA-SPM-CG-IC-AC-Governance-Control-Audit · HKMA SPM Corporate Governance (CG-1/2/3/5/6), Internal Control (IC-1/5), Auditing (AC-G) →Continuous Monitoring + Lifecycle Management is essential to ongoing trustworthy AI per Japan AI Guidelines for Business + integrates Safety + Accountability + Transparency Principles + addresses post-deployment risks.
JP-AIG-Continuous-Monitoring-Lifecycle-Model-Evaluation-Performance-Drift-Post-Deployment · Japan AI Guidelines Continuous Monitoring + AI System Lifecycle Management + Model Evaluation + Performance Drift + Concept Drift + Post-Deployment + Retraining Triggers + Safe Update + Decommissioning + Model Card Versioning →Maintain Risk Appetite Statement + Risk Limits + Concentration Risk Management + Limit Breach Protocols per 12 CFR Part 30 Appendix D Sections II.E + II.F + II.G + II.H + II.I + II.K.
OCCHS-3 · Risk Appetite Statement, Risk Limits, Concentration Risk, and Limit Breach Protocols →Questions people ask about stress testing
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