Featured Product

    CBK Implements Advanced Stress Testing Framework for Banks

    December 29, 2020

    The Governor of CBK announced the development of a new framework for stress testing the banking system. The CBK Governor Dr. Mohammad Y. Al-Hashel said that the newly developed framework represents a holistic, highly flexible, and dynamic stress-testing approach that allows the incorporation of varied scenarios with a multitude of micro- and macro-economic and financial variables with capabilities to reflect the impact in granular detail on different sectors. CBK will start applying the new stress-testing framework on the current year’s data and announce the results thereof in the first quarter of 2021.

    The Governor emphasized that CBK has been working on developing stress-testing frameworks and models since the COVID-19 outbreak. These frameworks, built in collaboration with an international consultant, match the increasingly complex and highly uncertain economic environment by utilizing advanced technology, analysis of a multitude of economic and banking variables, and input by global experts to ensure the ability of the newly developed framework to produce forward-looking outputs in line with the defined scenarios. To ensure its efficacy, the new framework was back-tested using 2019 data. The results proved the framework’s effectiveness and capability in translating the varied stress-testing scenarios with consistent outputs. 

    The Governor concluded his statement by indicating that the new stress-testing framework represents the completion of the first phase of a broader project, with the following phase now in-development. In the upcoming phase, the project will use machine learning and artificial intelligence to enhance output quality, improve the ability to analyze different drivers and capabilities, and capture evolving economic drivers and trends. This will instill a deeper understanding that will evolve alongside the economic landscape and banking sector and, hence, ensure the quality of the stress-testing exercises. 

     

    Related LinkPress Release

     

    Keywords: Middle East and Africa, Kuwait, Banking, Stress Testing, COVID-19, Basel, CBK

    Featured Experts
    Related Articles
    News

    PRA Letter Sets Out Findings on Reliability of Regulatory Reporting

    PRA published a "Dear CEO" letter that sets out findings of a review on the reliability of regulatory reporting and reiterates the supervisory expectations on regulatory reporting.

    September 10, 2021 WebPage Regulatory News
    News

    APRA Connect to Go Live; APRA to Reduce Reliance on CLF

    The Australian Prudential Regulation Authority (APRA) confirmed that its new data collection solution APRA Connect will go live on September 13, 2021.

    September 10, 2021 WebPage Regulatory News
    News

    FED Paper Explores Fintech Partnership Dynamics in Community Banks

    The Federal Reserve System (FED) published a paper describing the landscape of partnerships between community banks and fintech companies.

    September 09, 2021 WebPage Regulatory News
    News

    FDIC Selects Four Vendors for Next Phase of Rapid Prototyping Pilot

    The Federal Deposit Insurance Corporation (FDIC) has chosen four companies—Novantas Inc, Palantir Technologies Inc, PeerIQ, and S&P Global Market Intelligence LLC—to propose a pilot consisting of testing new reporting and analytical tools with a small group of FDIC-supervised institutions on a voluntary basis.

    September 09, 2021 WebPage Regulatory News
    News

    PRA Consults on Requirements to Identify Material Risk-Takers

    The Prudential Regulatory Authority (PRA), via the consultation paper CP18/21, proposed changes to the applicable requirements on the identification of material risk-takers for the purposes of the remuneration regime.

    September 08, 2021 WebPage Regulatory News
    News

    ESA Report Points to Elevated Credit and Cyber Risks in Wake of Crisis

    The Joint Committee of European Supervisory Authorities (ESAs) published its second 2021 joint risk assessment report for the financial sector.

    September 08, 2021 WebPage Regulatory News
    News

    IOSCO on Compliance of Credit-Sensitive Rate with Benchmark Principles

    The International Organization of Securities Commissions (IOSCO) published a statement reiterating the importance of continued transition to robust alternative financial benchmarks—that is, risk-free rates—to mitigate potential risks arising from the cessation of LIBOR, including the USD LIBOR.

    September 08, 2021 WebPage Regulatory News
    News

    FED Proposes Revisions to FR Y-9 Reports

    The Board of Governors of the Federal Reserve System (FED) proposed revisions and three-year extension of the FRY-9 reports on financial statements for holding companies (OMB Control Number 7100-0128).

    September 08, 2021 WebPage Regulatory News
    News

    SRB Chair Discusses Improving Resolution Framework for Mid-Size Banks

    The Single Resolution Board (SRB) Chair, Elke König, published an article on improving the resolution framework for medium-size banks.

    September 08, 2021 WebPage Regulatory News
    News

    ACPR Issues Update on Reporting with Legal Entity Identifier

    The French Prudential Control and Resolution Authority (ACPR) announced that the testing environment for the ACPR information system and the OneGate portal will be available to receive test reports with the Legal Entity Identifier (LEI) from September 08, 2021.

    September 07, 2021 WebPage Regulatory News
    RESULTS 1 - 10 OF 7456