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.
The benefits of stress testing include enhancing strategic decisions; improving risk management and capital planning; and enhancing the value of the bank. However, community bank stress testing can be a complex exercise for a bank to undertake itself. There are a variety of potential stress testing methods and economic scenarios for the bank to consider when setting up their test. In addition, the qualitative, written support for the test and its results is often as important as the results themselves. For all of these reasons, it is important that banks begin building their stress testing expertise sooner rather than later.
Whether you are considering performing the test in-house or with outside assistance, this webinar will be of interest to you. This complimentary webinar:
- Covers the basics of community bank stress testing
- Reviews the economic scenarios published by the Federal Reserve
- Provides detail on the key steps to developing a sound community bank stress test
- Discusses how to analyze and act upon the outputs of your stress tests
Jay D. Wilson, CFA, ASA, CBA, presented this Mercer Capital sponsored webinar on March 1, 2016.