This document outlines a compliance stress test mechanism used to evaluate capital balances, debt leverage ratios, and risk levels over time. Key metrics such as capital balance, net change in capital, total debt, total equity, and debt to equity ratios are calculated at the beginning and end of the period. The results are then used to determine compliance and risk levels on a scale from low to high risk. Actions such as product controls, asset pool stabilization, or regulatory intervention may be needed if the evaluation finds non-compliant or intolerably high risk levels.

1. COMPLIANCE STRESS TEST MECHANISM
Capital Balance
at Begining
Net Change in
Capital
Capital Balance
at End
Total Debt Leverage Ratio
Total Debt/Total Equity
A B C D D/C
HIGH INTOLERABLE
LOW TOLERABLE
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NON
COMPLIANT
MARKET
RISK
REGULATOR
Y RISK
COMPLIANT
PRODUCT
CONTROL
ASSET POOL
STABILIZATIO
N
NON
COMPLIAN
T
INCREASED
RISK
LOW RISK
COMPLIAN
T