The December 2015 issue of Bank Watch is available now, which features the article “Consider Adding Stress Testing to Your Community Bank’s New Year’s Resolution” written by Jay D. Wilson, Jr., CFA, ASA, CBA.
While there is no legal requirement for community banks to perform stress tests, recent regulatory commentary suggests that community banks should be developing and implementing some form of stress testing on at least an annual basis.
However, stress testing should be viewed as more than just a regulatory check-the-box exercise. Similar to stress tests performed by cardiologists to determine the health of a patient’s heart, bank stress tests can provide a variety of benefits that could serve to ultimately improve the health of the bank. Stress testing benefits include: enhancing strategic decisions, improving risk management and capital planning, enhancing the value of the bank.
This issue also contains the article “Shared Upside vs. Shared Downside” by Jeff K. Davis, CFA, as well as links to various articles of interest, public market indicators, M&A market indicators, and key indices of the top financial institutions in the U.S., providing insight into financial institution valuation issues.
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