As regulators prepare a new round of stress-tests, there is growing focus on enhancing risk management and information about systemic risks rather than just capital adequacy. The Bank of England unveiled a new strategy for stress-testing alongside the 2015 test, the results of which were published on December 1, 2015. The European Banking Authority (EBA) has also given more insight into how its 2016 stress-test will be conducted, with scenarios due to be published in February 2016, and results released in the third quarter.
Speaking at a conference at the London School of Economics in October 2015, the US Federal Reserve’s deputy director for financial stability policy, Andreas Lehnert, emphasised the difference between what he called “war-time and peace-time” stress-tests. The first type is designed to identify capital shortfalls and re-establish the credibility of the financial system and regulators during a crisis.
