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ST-1.6.4

Management actions should be based on careful analysis and deliberation by the Board and senior management. The range of management actions may vary depending on the magnitude of impact and likelihood of stressed scenarios. Actions pursued should be proportionate to the severity of the impact of the stress tests and may include:

(a) Reviewing the risk appetite or limits and business strategies;
(b) Restructuring, liquidating, unwinding or hedging exposures;
(c) Seeking additional collateral, buying credit protection or reducing risk exposures to specific sectors, countries and regions;
(d) Tightening underwriting standards;
(e) Adjusting the asset and liability composition;
(f) Building additional capital or liquidity buffers;
(g) Implementing recovery or contingency plans; and (h) Recourse to central bank funding facilities.
July 2018