what is a stress test system include?
A. Stress Testing Defined. Stress testing is a risk management technique used to evaluate the potential effects on an institutionâs financial condition, of a set of specified changes in risk factors, corresponding to exceptional but plausible events. Stress testing includes scenario testing and sensitivity testing (refer to Glossary). Stress testing is especially important after long periods of benign economic and financial conditions, when fading memory of negative conditions can lead to complacency and the underpricing of risk.