Stress Testing
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Stress Testing

Representative Engagements

The goal of stress testing is to evaluate impacts of potential scenarios on earnings, capital and liquidity. Stress testing enables management to gauge levels of capital appropriate for different lines of business and plan for contingencies. Regulators are increasingly examining how institutions manage, monitor and plan a coordinated approach at the enterprise level and at various sector-specific levels, and the resulting impact on banks’ capital adequacy.

Stress testing is now common to the entire balance sheet: assets, liabilities and capital. Regulators carefully scrutinize business plans and require that these plans reflect the right balance between revenue generation and risk. 

Our analyses and assessments include the following:

  • Validation and augmentation of existing programs
  • Evaluation of the stress scenarios assumptions used in the process
  • Design of new programs, as needed