Risk models and the application of stress tests are used to quantify risks when checking the solvency of banks. The financial crisis exposed the inadequacy of risk models in place at many institutes, also that the sensitivity of the models was insufficiently identified and that a "translation" into appropriate control measures did not take place in all instances. Moreover, the supervisory authorities had scant opportunity to produce effective comparisons due to the methodical sovereignty of the individual institutions.
Increasingly, the supervisory authorities therefore focused on the results of stress testing to produce comparative solvency analyses. In turn, this development means that institutes are facing increasingly strict and significantly more complex implementation and execution workloads, as well as the necessity to adapt to a constant cycle of new stress test requirements. This applies to all types of stress test required by the supervisory authorities.
With gwp, you will have a partner that helps to satisfy regulatory requirements for stress testing at all times.