International Program on Stress Testing, Risk Management and Supervision of Banks
Policy and Regulation
Tuesday, January 19, 2016
to Wednesday, January 20, 2016
The Rendezvous, Taj Mahal Palace, Colaba, Mumbai
In the recent years, stress testing of banks and the banking system has gained in sophistication. Stress Tests are being designed for macroprudential surveillance by attempting to identify build-up of systemic risk and vulnerabilities in the financial system. Stress Tests as a crisis management tool have been used in the US and the European Union. Supervisory or Microprudential Stress Tests assess an individual bank’s health and accordingly determine supervisory interventions for the institution. Authorities are using Stress Tests as a part of the regulatory capital framework by prescribing the minimum level of capital buffers that a bank must maintain even under stress situations. The systemic banks are subjected to a higher standard of stress testing compared to non-systemic banks.
The post crisis regulatory reforms have profound implications for risk management and capital planning in banks. The higher and better quality of capital and liquidity buffers contribute to the resilience of banks. The systemically important banks (SIBs) are required to maintain higher loss absorbency levels, implement higher standards of risk management, risk governance and controls and are subject to an enhanced regime of supervisory intensity and effectiveness. In order to minimise the negative impact of failure, SIBs need to put in place recovery plans and resolution authorities are required to implement resolution plans for SIBs.
In the Indian context, Reserve Bank of India has published the framework for Domestic Systemically Important Banks (DSIBs) and disclosed the list of Indian DSIBs. The 2015 Financial Stability Report of RBI assessed the resilience of the Indian banking system against macroeconomic shocks by using a series of macro stress tests for credit risk at the system, bank-group and sectoral levels.
Senior Program Director
Senior officials of Central Banks, Supervisory Agencies, Deposit Insurance Agencies. CGMs, GMs – in-charge of finance or risk management, Business Heads of banks.
View Program Description