Article 79
Comprehensiveness of the stress-testing programme
1. When assessing the comprehensiveness of the stress-testing programme required under Article 186(g) of Regulation (EU) No 575/2013, competent authorities shall verify that the institution is able to provide loss estimates under alternative adverse scenarios and that those scenarios are different from the ones used by the internal model but still likely to occur.
2. For the purpose of the assessment under paragraph 1, competent authorities shall verify that:
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(a) |
the alternative adverse scenarios are relevant to the specific holdings of the institution, reflect significant losses to the institution and capture effects which are not reflected in the outcomes of the model; |
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(b) |
the outcomes of the model under the alternative adverse scenarios are used in the actual risk management for the equity portfolio and are periodically reported to senior management; |
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(c) |
the alternative adverse scenarios are periodically reviewed and updated. |