The OCC’s Levonian on stress-testing

Cracking ice

Stress-testing is a tool. It is a tool used in many fields, particularly where failure of some component of a complex system can have seriously adverse consequences and high costs: aircraft wings, highway bridges, coronary arteries. And financial institutions.

Financial firms have long used stress-testing in various aspects of financial management. Firms use stress tests to assess the impact of adverse events on various elements of the organisation, or on the organisation as a whole, to gauge th

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