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Today not many financial institutions can claim their Stress Test report is credible enough to base their management strategy on.
Much of the challenge around Stress Testing is efficiently industrialising what are effectively a series of one-off, deep dive and analytic exercises. With this solution, banks can instigate an enterprise-wide business-as-usual regime around Stress Testing and benefit not only from less complexity when their regulatory supervisor decides to assess medium term capital positions but also gain the ability to include Stress Test insights into the tactical and strategic management of the business.
eFrame® for Banking Basel III Stress Testing enables a centralized approach to stress testing that is operationally efficient, overcoming the cost and resource issues that hinder a bank's ability to digest the results before the next stress test begins.
A dedicated framework, and working with assumptions that are in line with the actual stressed situation faced by the organisation and with the models actually used for the production of regulatory submissions, gives confidence in the results and subsequent report. As such, the results of the Stress Test and ad-hoc scenario analyses are respected in the business and action is taken on the reports.
Crucially, re-running stress tests to see whether restructuring in light of previous insights has created greater resilience, helps make and explain decisions to lend afresh or address capital levels.
Features and Functions
The innovative methodology and robust framework of this solution provide:
- Consistently reliable results period on period for several scenarios, and the ability to perform trend analysis over reporting periods
- A centralised dashboard for Stress Testing on the entire Risk Taxonomy
- Optimised process to calculate the effect of ad-hoc scenarios and of regulatory requests
- Analytical engine to calculate the effect of a set of events (What-if scenario) and direct assessment of the cause of limits breach under these events
- Laboratory environment to test the effect of scenario shocks on the models output
- Fully traceable and auditable input, modifications, risk models output, calculator output
- Powerful reporting with added analytical functionality.