ST-1.2.7
Responsibilities of the senior management must include:
(a) Ensuring implementation and monitoring of the stress testing programme;
(b) Developing stress testing policies and procedures in accordance with Section ST-1.4;
(c) Participating in the review and identification of appropriate stressed scenarios;
(d) Ensuring that scenarios are coherent with the risk profile of the bank's business and the market it operates in;
(e) Ensuring that stress testing methodology is proportional to the scale and complexity of the bank;
(f) Providing the Board and where relevant, Shari'a Supervisory Board with key information which has a bearing on stress testing exercise. This includes information on assumptions, extent of judgement used and limitations of the stress tests including the quantitative models used;
(g) Communicating the stress test results in a clear, concise and comprehensive manner for the Board to consider the impact on the bank's strategy, performance and financial condition;
(h) Developing and recommending appropriate management action plans to the Board to address potential vulnerabilities identified during the stress test exercise; and
(i) Ensuring there is timely and effective implementation of Board-approved management action plans.
July 2018