Fragile markets prompt banks to rethink tail risk

BNP Paribas and BTMU tout ‘scalable’ stress testing

underpressure
Continuous stress tests can help banks prepare for tail risk

Bank risk managers say they are learning the lessons of recent tail events, such as the steep decline in oil prices and the violent moves in the Swiss franc in January and US Treasuries last October. The solutions include 'scalable' stress testing and better dialogue between trading and risk staff, they say.

"I was getting criticised when oil was at $50 a barrel [because] we didn't do a stress test at $70. You don't have a crystal ball," said Jeff Simmons, head of enterprise risk at Bank of

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