Large Bank Examination Workshop February 2026

Reasons for Stress Testing Governance • See what might go wrong, and how bad things can go wrong • Not attempting to be an accurate forecast of actual future events • Assessing the consistency of risk appetite, business strategy, and capital planning • Setting firms risk appetite • Setting exposure limits • Business planning and strategic decision making • Contingency planning and crisis management

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Scenario Analysis • Helps bank to better understand the vulnerability of funding sources to stress scenarios • To identify when the firm may need to access alternative sources of funds • Develop risk mitigation strategies • Help decide how large of a liquidity buffer to maintain

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