Stress tests and capital adequacy: the story so far

Simulating banks' ability to survive another crisis is a valuable tool for regulators - we round up Risk.net's coverage of the growth of regulatory stress tests

Since the 2008 financial crisis brought leading banks around the world to the brink of collapse, regulators have been focused on ensuring the institutions they supervise could survive another similar shock in the future. Stress tests have been the foundation of this effort. 

The latest news

Twenty-five banks failed the latest round of ECB stress tests, but there are signs the Fed's stress scenarios are becoming less extreme as the crisis recedes.

FVA, correlation, wrong-way risk: EU stress test's hidden gems

Bafin blocked Deutsche Bank correlation exit, funds claim

EU stress tests show €14bn funding burden on Italy swaps

EU stress tests see €46bn trading loss for G-Sibs

25 banks fail ECB stress check on financial health

Fed reassures US banks on adverse scenario choice criteria

EBA's Enria: stress tests complicated by multi-speed CRR

Fed, CFTC officials back standard stress tests for CCPs 

CCAR – 2011

In March 2011, the Fed announced details of the annual Comprehensive Capital Analysis and Review. Using multiple scenarios and a much more detailed approach, CCAR has been an end-of-year commitment for major US banks ever since.

Fed orders banks to break open black boxes

Fed to kick off annual stress-testing programme 'towards end of the year'

Risk managers complain about Fed stress test workload

CCAR: a new holiday tradition

Success in Fed stress tests comes with a cost

Fed reassures US banks on adverse scenario choice criteria

Scap – 2009

The CCAR's predecessor was the US Supervisory Capital Assessment Program (Scap), run by the Federal Reserve Board in March 2009. It found 10 banks falling short by nearly $75 billion in capital when their ability to survive a deepening recession was tested.

Fed divulges process behind bank stress tests

Treasury silent on Tarp as banks submit $75bn SCAP capital plans

Cebs and EBA – 2009

The Committee of European Banking Supervisors (Cebs) ran its own stress tests in mid-2009, but did not initially release the results, and was later criticised for giving banks an easy ride. National European regulators ran their own tests, as did Cebs' successor, the European Banking Authority, along with the European Central Bank, in 2011 and 2014.

2013:

Bank of England still undecided over stress test scenarios

2011:

EBA stress test: Santander's sovereign swaps exposure not disclosed

EBA stress test: €3.4bn error in BPCE's derivatives exposure to France

2011 stress tests will struggle for credibility, say experts

EBA to launch new stress tests

EBA stress tests: adverse scenario toughened up

2010:

Seven banks fail Cebs stress tests

FSA surprises UK banks with tougher stress tests

All eyes on EU bank stress tests - but details remain elusive

2009:

Put to the test – Finansinspektionen and the value of stress tests

Cebs says banks 'sufficiently capitalised' after EU-wide stress testing