Taking the Mystery Out of Loan Stress Testing
Stress testing results are not only crucial to identifying higher-risk portfolios and individual borrowers, but even more critically, the potential impact on your capital level. Assessing the impact of one segment of your loan portfolio does not account for the total potential impact on capital. Learn how to use data from all loan portfolio segments as part of your overall capital adequacy testing and capital planning process.
AFTER THIS WEBINAR YOU’LL BE ABLE TO:
- Identify the uses and limitations of stress testing
- Know how to stress test at both the portfolio and individual borrower levels
- Construct realistic risk scenarios for assessing each segment of your loan portfolio
- Further analyze your stress test results and what to include in your stress test analysis
- Better understand how to take the concepts of stress testing your loan portfolio and apply them to other aspects of your organization
- Comprehend how stress testing is a key component of your institution’s capital planning
- Understand the regulatory expectations in today’s environment
WEBINAR DETAILS
The purpose of stress testing is to understand how a loan portfolio could react under varying degrees of stress, because it’s better to understand what could happen in stressed times far enough ahead to allow for adjustments to lessen the impact. CRE loans are the most sensitive to increased stress, however this webinar will not only cover CRE loans but also ag, C&I, owner-occupied CRE loans, and consumer loan portfolios. You’ll learn the types of stress factors to assess for each and how to construct realistic, useful, scenarios.
Once the results of the stress tests are known, how can the data be used? The data can highlight the segments – and specific borrowers – that will be most impacted and allow time to adjust your underwriting, risk appetite, and portfolio management to lessen the impact when the next, and inevitable, economic downturn occurs. In addition, this webinar will cover the regulatory expectations based on recent guidance and exams. Many of the concepts in this webinar can be adapted to other parts of your organization as you perform stress analysis in your capital planning process.
WHO SHOULD ATTEND?
This informative session is designed for CFOs, chief risk officers, chief credit/lending officers, credit analysts, and anyone involved in capital planning, loan portfolio risk management, and stress testing CRE, C&I, and ag borrowers.