Author： Bookstaber Rick Cetina Jill Feldberg Greg Flood Mark Glasserman Paul
Publisher： Henry Stewart Publications
ISSN： 1752-8887
Source： Journal of Risk Management in Financial Institutions, Vol.7, Iss.1, 2014-01, pp. : 16-25
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Abstract
Stress testing, which has its roots in risk management, should be adapted to support financial stability monitoring and to incorporate the interconnections and dynamics of the financial system. Since the 2008 financial crisis, bank supervisors have honed their financial stability monitoring tools and significantly expanded the use of stress testing in the supervision of the largest financial institutions. This paper describes areas in which further research could contribute to the development of best practices in stress testing and how stress tests can be made more useful for macroprudential supervision. Both near-term and longer-term objectives are discussed.
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