The depth and duration of the financial crisis has exposed inadequacies and weaknesses in existing stress testing principles. Stress testing is a critical tool used by banks in capital planning. This paper is a result of a consultation by the Basel Committee with industry examining stress testing practices and sets forth principles for sound stress testing practices and supervision for large complex banks including the implementation of stress testing programmes. The principles establish expectations for the role and responsibilities of supervisors when evaluating firms' stress testing practices.
