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

    APRA Publishes Results of Climate Risk Self-Assessment Survey

    The Australian Prudential Regulation Authority (APRA) has published the findings of its latest climate risk self-assessment survey conducted across the banking, insurance, and superannuation industries.

    August 04, 2022 WebPage Regulatory News
    News

    ACPR Publishes Updates Related to CRD IV and Covered Bonds

    The French Prudential Supervisory Authority (ACPR) published a notice related to the methods for calculating and publishing prudential ratios under the Capital Requirements Directive (CRD IV) and the minimum requirement for own funds and eligible liabilities (MREL).

    August 03, 2022 WebPage Regulatory News
    News

    EIOPA Publishes Guidance on Climate Change Scenarios in ORSA

    The European Insurance and Occupational Pension Authority (EIOPA) published the risk dashboard based on Solvency II data and the final version of the application guidance on climate change materiality assessments and climate change scenarios in the Own Risk and Solvency Assessment (ORSA).

    August 02, 2022 WebPage Regulatory News
    News

    EBA and ECB Respond to Proposals on Sustainability Disclosures

    The European Banking Authority (EBA) and the European Central Bank (ECB) published their responses to the consultations of the International Sustainability Standards Board (ISSB) and the European Financial Reporting Advisory Group (EFRAG) on sustainability-related disclosure standards.

    August 01, 2022 WebPage Regulatory News
    News

    BIS Report Notes Existing Gaps in Climate Risk Data at Central Banks

    A Consultative Group on Risk Management (CGRM) at the Bank for International Settlements (BIS) published a report that examines incorporation of climate risks into the international reserve management framework.

    July 29, 2022 WebPage Regulatory News
    News

    EBA Publishes Multiple Regulatory Updates for Regulated Entities

    The European Banking Authority (EBA) published the final guidelines on liquidity requirements exemption for investment firms, updated version of its 5.2 filing rules document for supervisory reporting, and Single Rulebook Question and Answer (Q&A) updates in July 2022.

    July 29, 2022 WebPage Regulatory News
    News

    EIOPA Issues SII Taxonomy and Guide on Sustainability Preferences

    The European Insurance and Occupational Pensions Authority (EIOPA) published Version 2.8.0 of the Solvency II data point model (DPM) and XBRL taxonomy.

    July 29, 2022 WebPage Regulatory News
    News

    EESC Opines on Proposals on CRR and European Single Access Point

    The European Union published, in the Official Journal of the European Union, an opinion from the European Economic and Social Committee (EESC); the opinion is on the proposal for a regulation to amend the Capital Requirements Regulation (CRR).

    July 29, 2022 WebPage Regulatory News
    News

    HM Treasury Publishes Multiple Regulatory Updates in July 2022

    HM Treasury published a draft statutory instrument titled “The Financial Services (Miscellaneous Amendments) (EU Exit) Regulations 2022,” along with the related explanatory memorandum and impact assessment.

    July 29, 2022 WebPage Regulatory News
    News

    APRA Consults on Prudential Standard for Operational Risk

    The Australian Prudential Regulation Authority (APRA) is seeking comments, until October 21, 2022, on the introduction of CPS 230, which is the new cross-industry prudential standard on operational risk management.

    July 28, 2022 WebPage Regulatory News
    RESULTS 1 - 10 OF 8422