EBC Financial Terms TIPS:Bank Stress Test

2023-05-12
Summary:

A bank stress test is an analysis conducted under hypothetical scenarios designed to determine whether a bank has enough capital to withstand a negative economic shock.

Bank Stress Test:

A bank stress test is an analysis conducted under hypothetical scenarios designed to determine whether a bank has enough capital to withstand a negative economic shock. These scenarios include unfavorable situations, such as a deep recession or a financial market crash.Bank stress tests were widely put in place after the 2008 financial crisis. Many banks and financial institutions were left severely undercapitalized.

Bank Stress Test

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