Since the advent of Comprehensive Capital Analysis and Review (CCAR), compliance has been a priority, right alongside business strategy, competitiveness and risk management.
With every review cycle, compliance standards are enhanced. Stricter stress testing standards have posed challenges, particularly for bank holding companies (BHCs), around testing and validating their stress testing models.
Having the right models in place—and validating them properly—is vital. Our paper, Comprehensive Capital Analysis and Review: Industry Practices in Model Validation, can help BHCs build and test strong stress testing models, saving them from the risk of failure—but also giving them a crucial competitive advantage.