We are pleased to announce the latest post on the SUARA SEACEN Blog by Masyitah Rosmin, Research Associate at the Centre.
Conducting Microprudential Bank Stress Tests: Exploring the Why and How
This blog highlights stress-testing practices across several jurisdictions and draws attention to similarities and some differences on how they are conducted. It then sets out a practitioner-friendly microprudential workflow, from governance and scenario design to mapping GDP, inflation, unemployment, and interest-rate shocks to the deterioration in the asset quality of the bank balance sheet. This will impact provisions and capital through a rise in non-performing loans, which in turn will inform capital planning and supervisory dialogue. The blog also outlines principles for transparent and credible communication of outcomes of the stress tests.
Click here to read.
