United Kingdom: Financial Sector Assessment Program-Stress Testing the Banking Sector-Technical Note

June 17, 2016

Preview Citation

Format: Chicago

United Kingdom: Financial Sector Assessment Program-Stress Testing the Banking Sector-Technical Note, (USA: International Monetary Fund, 2016) accessed November 21, 2024

Summary

This paper discusses how Financial Sector Assessment Program (FSAP) stress test assesses the resilience of the banking sector as a whole rather than the capital adequacy of individual institutions. The FSAP approach to stress testing is essentially macroprudential: it focuses on resilience of the broader financial system to adverse macro-financial conditions rather than on resilience of individual banks to specific shocks. This test ensures consistency in macroeconomic scenarios and metrics across firms to facilitate the assessment of the banking system as a whole. The stress test analysis is intended to help country authorities to identify key sources of systemic risk in the banking sector and inform macroprudential policies to enhance its resilience to absorb shocks.

Subject: Banking, Credit risk, Financial crises, Financial regulation and supervision, Financial Sector Assessment Program, Financial sector policy and analysis, Solvency stress testing, Stress testing

Keywords: Banking system, BoE scenario, Cash flow, CR, Credit risk, Financial Sector Assessment Program, Fixed income, Global, Hurdle rate, Interest rate, ISCR, Money market, Mortgage portfolio, Single currency, Solvency stress testing, Stress test, Stress testing, U.K. bank, U.K. leverage framework, U.K.-headquartered bank, Yield curve

Publication Details

Pages:

91
Volume:

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DOI:

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Issue:

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Series:

Country Report No. 2016/163
Stock No:

1GBREA2016011
ISBN:

9781484394120
ISSN:

1934-7685

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