20 December 2017

Consultative document on stress testing principles and a range of practices report issued by the Basel Committee

The range of practices report describes and compares supervisory and bank stress testing practices and highlights areas of evolution. The report finds that, in recent years, both banks and authorities have made significant advances in stress testing methodologies and infrastructure. The report draws primarily on the results of two surveys, respectively completed by Basel Committee member authorities and by banks (54 respondent banks from across 24 countries, including 20 global systemically important banks). The survey results are supplemented by case studies and other supervisory findings. A stress testing taxonomy is included with a common set of definitions for stress testing terms to aid the dialogue between banks and supervisors.

Given the rapid evolution in stress testing practices, the Committee also reviewed its current set of stress testing principles as published in May 2009. The consultative document published today sets out a proposal to replace this set of principles with a new streamlined version. The proposed new version states the principles at a high enough level to be applicable across many banks and jurisdictions and remain relevant as stress testing practices continue to develop.

The Committee welcomes comments on all aspects of the proposed new principles. Comments should be uploaded here by 23 March 2018. All comments will be published on the website of the Bank for International Settlements (BIS) unless a respondent specifically requests confidential treatment.

 consultative document on stress testing principles

range of practices report on supervisory and bank stress testing

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