Stress Testing at Major Financial Institutions: Survey results and practice

by a BIS working group established by the Committee on the Global Financial System

January 2005

Executive Summary: Stress testing has evolved as a practical risk management tool and its applications are expanding. This is evident in the following report, which summarises the findings of a Committee on the Global Financial System (CGFS) exercise on stress testing at banks and securities firms. The aims of the project were to review what financial institutions perceived to be the main risk scenarios for them based on the stress tests they were running, and to examine how stress test practices have evolved over the past few years. As part of the exercise, 64 banks and securities firms representing 16 countries participated in a survey of enterprise-wide stress tests they were running as of the end of May 2004; national central banks also conducted interviews with a number of financial institutions.

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