It is important for banks to construct sufficiently severe, but plausible stress scenarios and examine the resultant cash flow needs. While banks should aim to cover different stress events and levels of adversity, they must, at a minimum, include the following types of scenarios in their stress testing exercise:

(a) An institution-specific stress scenario;
(b) A general market stress scenario; and
(c) A combination of both, including possible interaction with other risks.
August 2018