Enterprise risk management (ERM) stress testing continues to be one of the regulators’ hot buttons. Guidance has been issued to provide direction to financial institutions with $10 billion or less in total assets on using stress testing to identify and quantify risk in the existing balance sheet and help establish effective strategic and capital planning processes. The emphasis is that all financial institutions, regardless of size, should have the capacity to analyze the potential impact of adverse outcomes on their financial condition.
Additionally, regulators have provided guidance for enterprise risk stress testing for institutions with consolidated assets of more than $10 billion. While initially intended for these large financial institutions, many of the significant points apply to all financial institutions in the various stress tests they conduct or will be expected to conduct. These principles represent the regulators’ views of best practices and define their expectations.
With these issuances, the regulators state that all financial institutions should be using stress testing for three types of risk – credit, interest rate, and funding/liquidity – as a part of their ERM program. Accordingly, the regulators state “Community [financial institution] management can use stress testing to establish and support reasonable risk appetite and tolerances, set concentration limits, adjust strategies, and appropriately plan for and maintain adequate capital levels.” This presentation will help you establish and use stress testing as recommended by the regulators.
- ERM stress testing: common elements and significant points
- Scenario-based stress testing
- Three levels of stress
- Stress criteria and assumptions
- Impact analysis
- Using stress-test results
- Tying stress testing to risk appetite and capital planning
- Expected and unexpected loss
- Earnings at risk (EaR)
- Concentration management
- TAKE-AWAY TOOLKIT
- Employee training log
- Quiz you can administer to measure staff learning and a separate answer key
Attendance verification for CE credits provided upon request.
WHO SHOULD ATTEND?
This informative session is designed for CEOs, presidents, CFOs, chief risk officers, senior credit officers, ALCO committee members, and the risk management team, including board members.
ABOUT THE PRESENTER – S. Wayne Linder, Young & Associates, Inc.
A thirty-year banking veteran, Wayne Linder was formerly the CEO of a community bank. As a Senior Consultant with Young & Associates, Wayne works as a lending and management consultant. He performs loan reviews, fair lending reviews, and regulatory compliance audits; facilitates strategic planning retreats; assists financial institutions under regulatory enforcement agreements; performs management and board of director assessments; and develops and implements written policies throughout all areas of the financial institution. Wayne is a popular seminar speaker with both national and international experience. In addition to his many published articles, he is the author of Loan Review Deskbook.
|Over $75 million
|$25 - $75 million
|Under $25 million
Scholarships are available for all KCUA education events. Scholarships pay 100% of registration fee for credit unions under $25M, 50% for credit unions between $25-$75M and 25% for credit unions over $75M.
Upon registration, you will receive an email confirmation that you can print for your records.