1.A Bank must implement a forward-looking stress-testing program as part of its comprehensive approach to risk management. Extreme, but plausible, adverse scenarios for a range of material risks must be included in the stress-testing program, commensurate with the size of the Bank’s risk exposures. The results of the stress-testing program must be reflected on an ongoing basis in the Bank’s risk management, including contingency planning and the Bank’s internal assessment of its capital and liquidity.
A Bank’s internal process for assessing capital and liquidity requirements must take into account the nature and level of risks taken by the Bank. In addition to the specific risks identified in the Central Bank Capital Adequacy and Liquidity Regulations and Standards, a Bank must consider all other material risks.