A Dodd-Frank Act stress testing guide for senior bank executives whose institutions have $10B in assets or are growing quickly.
Think regulatory stress testing is only for the biggest banks? Well, maybe for right now, but this practice continues to be required of increasingly more banks, which means if you haven’t had to worry about stress testing yet, you might need to soon. Regulatory stress testing is designed to see if you have enough capital to survive a series of arbitrary shocks to the economy; it should not be confused with the types of analyses that support critical financial measures such as risk-adjusted returns or those that determine economic capital requirements.