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| Stress testing is a form of scenario analysis.
| | == Summary == |
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| In stress testing, worst case data are input into a financial model.
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| The idea is to test whether creditworthiness - or any other attribute being modelled - is robust enough to survive the selected 'worst case' scenario.
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| Stress testing necessarily involves a significant degree of judgement and subjectivity in identifying the appropriate 'worst case' inputs with which to run the stress test.
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| In the banking context, stress testing is routinely carried out on banks to identify the level of risk of their failure.
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| == See also == | |
| * [[Back test]]
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| * [[Black swan]]
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| * [[Heuristic]]
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| * [[Idiosyncratic stress]]
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| * [[Model]]
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| * [[PRA buffer]]
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| * [[Reverse stress test]]
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| * [[Scenario analysis]]
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| * [[Sensitivity analysis]]
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| * [[Shock]]
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| * [[Stress]]
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| [[Category:Risk_frameworks]]
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Latest revision as of 09:28, 27 July 2023
Summary
Importing files from local file repository
