Mixed results for banks following toughest US stress test so far

The 35 banks participating in this year’s US stress tests were hit by theoretical rising credit card loans going bad and the real effects of recent accounting changes while some of the banks' capital plans were challenged.

US G-SIBs unlikely to meaningfully benefit from proposed changes to CCAR

Proposed changes to CCAR are unlikely to provide much benefit for US US globally systemically important banks.

Ukraine flag

Ukraine uses stress testing to help clean up banking system

Ukraine has experienced severe problems with its banking sector over the past few years. As part of the clean-up, the National Bank of Ukraine has leaned increasingly on stress testing to identify bad lending and to drive improvements in risk management practices. By Justin Pugsley.

EU CCPs shown to be resilient to multiple clearing member defaults

EU central counterparty clearing houses shown to be resilient under second stress test, which also included a liquidity component 

Foreign banks to draw up new resolution plans by year end

The Fed and FDIC have written to 19 foreign banks with US operations asking them to produce new resolution plans for their US units

Eleanny Wernecke

Stress tests improving, but challenges remain

Stress testing is now an integral part of the supervisory process and a recent report from the Basel Committee on Banking Supervision noted big improvements in the technique over the last 10 years, but it also highlighted some ongoing challenges

EU bank stress tests to incorporate IFRS 9 for the first time

EU bank stress tests to include impact of IFRS 9 accounting standards for the first time and harbour some of severest macro-economic scenarios to date

Tough US stress tests to include five foreign firms for the first time

This year’s US stress tests include some of the toughest macro-economic scenarios so far, including sharp rises in unemployment and big falls in asset prices, and five foreign firms with significant US operations are to be included for the first time

Fed's Quarles proposes greater transparency for bank stress tests

US Fed proposes injecting more transparency into its stress testing regime to bolster its credibility.

Bank of England stress tests reveal UK banks in strong position

All the main participating UK banks passed their stress tests for the first time in late 2017, but concerns linger over exposure to UK consumer credit, EU-related derivatives contracts and IFRS-9 accounting standards. Justin Pugsley reports.

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