We design testing solutions that give institutions answers to fundamental questions — including how to plan for and manage the biggest risks they face. We help transform stress testing from a backward-looking exercise that focuses on rudimentary historical scenarios and basic compliance to a predictive business tool that aids companies in planning for the future.
We provide valuable solutions for organizations at all stages of implementation and in all regulatory regimes. We have helped clients prepare for Comprehensive Capital Analysis Reviews, Dodd-Frank Act stress tests, and capital-plan reviews, as well as stress testing in the European Union and the United Kingdom. Our work ranges from benchmark reviews for companies with substantial experience and well-conceived frameworks, to comprehensive assistance and planning for companies in the initial implementation stages.
Core Risk Management
Promontory Stress Testing Solutions support chief risk officers, chief financial officers, and compliance departments in making stress testing an integral part of risk management, risk-based decision making, and risk-driven planning. Though we emphasize an enterprisewide perspective that provides risk managers a consistent method to assess and report risk across disciplines, the practical applications of stress testing can be as instructive to business-line managers making operational decisions as they are to top executives making strategic ones. Properly conceived and executed, stress testing makes institutions more efficient and better informed about what drives risk at every level of the organization.
Promontory is uniquely qualified to interpret regulatory requirements and industry best practices to provide reviews of stress-testing programs, implement refinements in a phased, cost-effective manner, and deliver comprehensive frameworks.
Our solutions match the complexity of the institution. We offer:
- Governance, framework, and strategy reviews
- Model validation, benchmarking, and calibration
- Risk-factor selections and scenario adaptation
- Model provision and development
- Outsourced services and reporting
Our services are equally effective as part of a coordinated engagement or as a stand-alone project. Institutions at any stage of implementation can target the assistance they seek. We adapt our response to emphasize practical, custom solutions, rather than hand down a set of prescriptive, predetermined remedies.
Specific examples of projects include:
- Performing gap analysis of governance, infrastructure, and analytic capabilities against regulatory requirements and industry best practices
- Developing phased implementation plans and providing solutions when gaps are identified
- Reviewing governance, policies, and procedures to find weaknesses and fix them
- Assisting firms in meeting supervisory expectations for a Capital Adequacy Process, including interpretation of specific feedback from supervisors in their annual post-DFAST letter, and in developing remediation plans to address supervisory concerns
- Implementing the right level of granularity across business lines and risk types, informed by regulatory insight and risk-materiality assessments
- Developing and refining idiosyncratic and hypothetical stress scenarios, including an assessment of plausibility and materiality
- Independent model reviews, with validation and calibration where necessary
The Promontory Advantage
Promontory is your best-choice partner providing:
- Unmatched regulatory expertise and practical experience
- Solutions that won’t duplicate past efforts
- Manageable project scope with scaled expense and phased implementation
- Customized tools and benchmarks
- Actionable results and insight