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Stress Tests: What Bank Bosses Worry About Most

FR 2052a

If you work in financial services, you may have noticed that your executives aren’t getting enough sleep. They’re most likely tossing and turning at night, thinking about the shift to digital, stringent regulations, and, as The Financial Times recently said: “Bank bosses perhaps are worried most about not being publically humiliated by a failing grade.”

We know this first-hand, as we regularly advise financial institutions on how to better measure and manage risk, as well as allocate capital. Our program oversight and subject matter expertise helps banks effectively anticipate, evaluate, and mitigate the risks they face.

With that in mind, The Financial Times just released a short video on stress tests, namely Comprehensive Capital Analysis and Review (CCAR) and Dodd-Frank Act stress testing (DFAST), which are intended to assess whether the largest bank holding companies operating in the United States have sufficient capital to continue operations throughout times of economic and financial stress.

The video also highlights results from recent tests. It’s worth a look!

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Eugene Sefanov

Director, Industry and Regional Marketing

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