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Version date: 1 January 2019 - onwards
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12.1 Use of supervisory stress testing by competent authorities (paras. 570-575)

570. Competent authorities should, also on the basis of Article 100 of Directive 2013/36/EU, use supervisory stress testing to facilitate SREP and, in particular, supervisory assessment of its key elements, as described in Titles 4 to 9. In particular, supervisory stress testing should help competent authorities, where appropriate, with the following:

a. The assessment of institutions’ individual risks to capital as referred to in Title 6, or risks to liquidity and funding as referred to in Title 8.

b. The assessment of the reliability of institutions’ stress testing programmes, as well as the relevance, severity and plausibility of scenarios for institutions’ own stress tests used for ICAAP and ILAAP purposes. This may include challenging institutions’ main assumptions and risk drivers.
 

c. The assessment of institutions’ ability to meet TSCR and OCR in the context of the assessment of capital adequacy, as specified in Section 7.7. Depending on the coverage and type of th


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