Governance over Stress Testing

By David E Palmer

Governance and controls are a very important aspect of stress testing, yet are sometimes overlooked or given insufficient attention by financial institutions.11 For the purposes of this chapter, the term “stress testing” is defined as exercises used to conduct a forward-looking assessment of the potential impact of various adverse events and circumstances on a banking institution. Proper governance and controls over stress-testing not only confirm that stress tests are conducted in a rigorous m

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