List of bank stress tests
This list covers formal bank stress testing programs, as implemented by major regulators worldwide. It does not cover bank proprietary, internal testing programs.
Regulators devise hypothetical future adverse economic scenarios to test banks. These established scenarios are then given to the banks in their jurisdiction and tests are run, under the close supervision of the regulator. They evaluate if the bank could endure the given adverse economic scenario, survive in business, and most importantly, continue to actively lend to households and business. If it is calculated that the bank can absorb the loss, and still meet the minimum bank capital requirements to remain in active business, they are deemed to have passed.
For example, in the U.S. in 2012, an adverse scenario used in stress testing was all of the following:
- Unemployment at 13 percent
- 50 percent drop in equity prices
- 21 percent decline in housing prices.
- Monetary Authority of Singapore
- Annual Industry-Wide Stress Testing exercise (usually around Q1)
- International Monetary Fund
- 2011 and 2012 stress testing of Japan banks, Financial System Stability Assessment Update (FSAP)
- China Banking Regulatory Commission
- 2011 CARPLES risk indicators framework
- Financial Services Authority
- European Banking Authority
- Federal Reserve System
- 2009 Supervisory Capital Assessment Program (SCAP)
- Note: there was no 2010 stress test in the USA
- 2011 Comprehensive Capital Analysis and Review (CCAR)
- 2012 Comprehensive Capital Analysis and Review (CCAR)
- 2013 Comprehensive Capital Analysis and Review (CCAR)
- Note: 2013 US bank stress test results have been released. stress test results
- A private conference call was held with banks to notify them of a new, two part information release by the Fed [Dow Jones]
- March 7, 2013 - Banks will be privately notified of the FED's tentative decision on capital distribution plans.
- Banks receiving a "no" will then have a 48 hours to privately resubmit to the Fed a reduced a distribution plan.
- March 14, 2013 - the Fed will publicly disclose final decisions on requests for capital distributions
- The week of private negotiations between the bank and the Fed will allow banks to adjust their request downward to what the Fed will allow. This was specifically designed to allow banks to avoid "embarrassing capital-plan rejections"
- Shareholder lawsuits are expected if banks fail to disclose capital distribution plans and FED rejections (even if labeled "informal") as the majority of shareholders and prospective shareholders regard bank dividend and share buyback plans, and limits, to be extremely material information.
- Banks may not follow FED advice and release capital distribution plans in advance of March 14. [Bloomberg]
- Bank regulation
- Basel III
- Stress test (financial)
- Systemically important financial institution
- List of systemically important banks
- "2012 Stress Test Release". Federal Reserve. Retrieved 23 February 2013.
- "Financial System Stability Assessment Update (FSAP) 2011 and 2012". International Monetary Fund. Retrieved 23 February 2013.
- "The CBRC held 2012 Large Bank Supervisory Work Conference". China Banking Regulatory Commission. Retrieved 23 February 2013.
- "Stress and scenario testing CP08/24". Financial Services Authority. Retrieved 23 February 2013.
- "Stress and Scenario Testing Feedback on CP08/24". Financial Services Authority. Retrieved 23 February 2013.
- "2011 Comprehensive Capital Assessment Review (CCAR)". Federal Reserve. Retrieved 22 February 2013.
- "2012 Comprehensive Capital Assessment Review (CCAR)". Federal Reserve. Retrieved 22 February 2013.
- "2013 Comprehensive Capital Assessment Review (CCAR)". Federal Reserve. Retrieved 22 February 2013.
- "Fed, Banks Clashed Over Stress Test Results Release". Dow Jones Newswire. March 05, 2013. Retrieved 7 March 2013.
- "Banks Said to Weigh Defying Fed With Dividend Disclosures". Bloomberg. Mar 7, 2013. Retrieved 7 March 2013.
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