ST-A.1.1

This Module sets out the Central Bank of Bahrain's ('CBB's') directives and guidance to conventional bank licensees operating in Bahrain on the key requirements of an effective stress testing programme, and describes the CBB's approach to assessing the adequacy of bank stress testing practices. The contents of this Module apply to all conventional banks, except where noted in individual Chapters.

ST-A.1.2

This Module should be read in conjunction with other parts of the Rulebook, mainly:

ST-A.1.3

This Module contains the CBB's Directive (as amended from time-to-time) relating to Stress Testing and is issued under the powers available to the CBB under Article 38 of the Central Bank of Bahrain and Financial Institutions Law 2006 ('CBB Law'). The Directive in this Module is applicable to all conventional bank licensees (including their approved persons).

ST-A.1.4

The requirements for stress-testing covered in this Module for the purpose of capital adequacy, ICAAP, recovery planning and reverse stress testing apply to Bahraini conventional bank licensees only.

ST-A.1.4A

Branches of foreign bank licensees must apply the requirements included in this Module for risks that are material and to the extent appropriate. If branches of foreign bank licensees do not have established policies, procedures, processes and systems at a branch level, they must satisfy the CBB that there are equivalent arrangements at their head office or regional office.

ST-A.1.5

For an explanation of the CBB's rule-making powers and different regulatory instruments, see Section UG-1.1.

ST-A.2.1

This Module is issued in July 2018 as part of Volume One of the CBB Rulebook. The requirements in this Module become effective from the date of issuance. Any material changes that have subsequently been made to this Module are annotated with the calendar quarter date in which the change was made; Chapter UG-3 provides further details on Rulebook maintenance and version control.

ST-A.2.2

The changes made to this Module are detailed in the table below:

Summary of Changes