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  • The Board of Directors and Senior Management Oversight

    • ST-1.2.5

      The Board and senior management must ensure that a strong risk culture and governance policy underpins the effective use of stress testing.

      July 2018

    • ST-1.2.6

      Responsibilities of the Board include:

      (a) Approving the policies and procedures governing the stress testing programme, and ensuring sufficient resources and expertise to effectively implement the programme;
      (b) Ensuring that the design of the stress testing programme is consistent with the bank's risk appetite and is appropriate to the nature, scale, complexity of its risk-taking activities and overall business strategy;
      (c) Ensuring that views and inputs from relevant functions and departments are considered in the stress testing programme;
      (d) Providing constructive challenge on the results of stress tests, scenarios, key assumptions and methodologies used in the stress tests;
      (e) Reviewing the appropriateness of management actions proposed by senior management to mitigate potential vulnerabilities, taking into consideration the factors set out in Section ST-1.6;
      (f) Approve management actions; and
      (g) Commissioning regular stress testing programme in accordance with Section ST-1.7.
      July 2018