An overview of the stress testing landscape for operational risk

Report - June 2023

This paper provides an overview of the stress testing landscape in relation to operational risk, including common practice, key challenges, and the path forward.

From the global financial crisis to the COVID-19 pandemic and subsequent economic downturn, to the invasion of Ukraine and escalating inflation rates, financial organisations are regularly faced with challenging operating conditions. Regulatory stress testing programmes aim to ensure the future stability of the financial system, by assessing firms’ capacity to withstand such extreme circumstances.

The paper was developed in partnership with the ORX Analytics Community and Banking Analytics Working Group, and is available to all ORX members to read.

Podcast: Key learnings about the global stress testing landscape

Listen to this episode of the ORX Operational Risk Podcast to hear some of the key learnings from our recent work on stress testing conducted for the ORX Analytics Community. Learn what the key challenges are, some best practice ideas, and three key elements stress tests should have.

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