79. Institutions should ensure that stress testing is based on severe but plausible scenarios and …

Institutions should ensure that stress testing is based on severe but plausible scenarios and the degree of severity should reflect the purpose of the stress test. To that end, stress tests should be:

• a) meaningful in terms of addressing relevant risks to the institution with a view to promoting the stability of the institution under adverse conditions and, in the case of systemically important banks, also the financial system at all points in the economic cycle and over market fluctuations including funding markets; and
• b) consistently applied across the institution, recognising that the impact of identical scenarios is not necessarily severe for all business lines.

1. Forbhreathnú

1.1 Tagairtí

1.2 Ceanglais aitheanta

1.3 Caighdeáin ghaolmhara

2. Ceanglais aitheanta

3. Caighdeáin ghaolmhara

• EBA - Published by the European Banking Authority at https://www.eba.europa.eu/