General Information & Client Services
  • Americas: +1.212.553.1653
  • Asia: +852.3551.3077
  • China: +86.10.6319.6580
  • EMEA: +44.20.7772.5454
  • Japan: +81.3.5408.4100
Media Relations
  • New York: +1.212.553.0376
  • London: +44.20.7772.5456
  • Hong Kong: +852.3758.1350
  • Tokyo: +813.5408.4110
  • Sydney: +61.2.9270.8141
  • Mexico City: +001.888.779.5833
  • Buenos Aires: +0800.666.3506
  • São Paulo: +0800.891.2518
September 2013

The Target Architecture for Stress Testing diagram illustrates the building blocks of a sound enterprise-wide stress testing system. The architecture highlights the need for a solution that will facilitate systems and models integration, data flow coordination, and automated reporting.

Figure 1. Target architecture for stress testing
Target architecture for stress testing
Source: Moody's Analytics

Below is a brief description of six key elements of the architecture:

1. Data integration and cleansing engine, and finance and risk datamart

This data management platform is designed to provide the infrastructure needed to implement a world-class stress testing framework by managing and centralising all data required for the Asset Quality Review and stress testing.

2. Stress testing engine

The stress testing engine enables bankers to perform the calculations required to forecast expected losses, impairments, and other income and losses indicators under stress conditions.

3. Scenario management module

This module enables bankers to define custom scenarios and leverage pre-defined macroeconomic scenarios, including regulatory scenarios.

4. Stress testing workflow module

This module includes automated software and reporting tools designed to streamline the Asset Quality Review and enterprise-wide stress testing process.

5. Model deployment interface

This interface enables bankers to deploy the models required to conduct stress tests.

6. Regulatory reporting engine

Regulatory reporting tools streamline and facilitate regulatory and business reporting by capturing, consolidating, and reporting the data. Ideally, the tools are based on templates that reflect the requirements of each local supervisor.

Notes

1 No reporting guidelines have been published yet.

As Published In:
Related Insights

IFRS 9 Survey Results

This article is a summary of the views expressed by regional banking institutions in a recent survey about IFRS 9 regulation. The survey was conducted to assess progress, potential challenges, and plans of banks with regards to IFRS 9 compliance.

June 2016 WebPage María C. Cañamero, Michael McDonald, Yagmur Uenal

Global Banking Regulatory Radar

The Moody’s Analytics Regulatory Radar provides an overview of the main regulatory guidelines affecting the banking industry. It is a proprietary tool developed to monitor regulations in the immediate, medium, and long term, across multiple jurisdictions.

December 2015 WebPage María C. Cañamero

Global Banking Regulatory Radar

The Global Banking Radar highlights the busy regulatory agenda that banks will face over the next couple of years. The trend of increased regulation that began in the EU and the US is now spreading to other regions, requiring banks worldwide to comply with increasingly stringent and complex requirements.

November 2014 WebPage Avinash Arun, María C. Cañamero

Regulatory Radar for Insurance: Emerging Regulations are Reshaping the Global Insurance Industry

The increased focus and attention on the insurance industry are illustrated by the acceleration of regulatory efforts across the globe. Keeping up with the pace of regulatory change in the current environment is one of the greatest challenges facing any insurance company.

May 2014 WebPage María C. Cañamero, Sandy Sharp

Target Architecture for Stress Testing (North America)

The Target Architecture for Stress Testing diagram illustrates the building blocks of a sound enterprise-wide stress testing system. The architecture highlights the need for a solution that will facilitate systems and models integration, data flow coordination, and automated reporting.

November 2013 WebPage María C. Cañamero, Alex Kang

Preparing for the Stress Tests: Regulatory Timeline and Requirements

The Moody’s Analytics Regulatory Timeline provides a high-level overview of the stress testing regulations in both the United States and European Union in the immediate and medium-term.

November 2013 WebPage María C. Cañamero

Stress Testing Best Practices: A Seven Steps Model

Implementing stress testing practices across the various bank divisions is a complex process. In order to address the need for an implementation framework, Moody’s Analytics has created a Seven Steps Model.

September 2013 WebPage Dr. Christian Thun, Sandrine Prioux, María C. Cañamero

Regulatory Radar

The Moody’s Analytics Regulatory Radar is a proprietary tool developed to monitor regulations in the immediate and medium term, across market segments and jurisdictions. This version provides an overview of key rules and regulatory guidelines recently published across Europe in several financial services segments.

September 2013 WebPage María C. Cañamero, Sandrine Prioux