What is stress testing?
Stress testing is used by the Bank to make sure the financial system, including banks and building societies, insurance companies and central counterparties, is strong enough to withstand severe scenarios such as a financial crisis. We set ‘stress tests’ to find out if these sectors and individual firms are prepared for the worst.
The Bank undertakes financial resilience stress testing for banks and building societies, insurers and central counterparties. System-wide exploratory scenarios also take place to test the impact of an adverse scenario on a particular market or the whole financial system. Cyber & Operational Resilience Stress Tests are used to understand the impacts of operational disruption, such as cyber attacks.
