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ST-1.1.3

Stress testing can be used for multiple purposes within the bank. While this Directive is focused on the integrated firm-wide stress testing which serves to identify weaknesses and vulnerabilities in a bank's risk profile and in turn evaluate its capital adequacy and liquidity position under adverse scenarios stress testing should also be conducted for recovery planning and ICAAP. However, the underlying methodologies for scenario development and stress testing should be consistent regardless of whether they are used for firm-wide stress testing, ICAAP or recovery planning.

July 2018