The CRO of Bank Alpha is reviewing a report from the US Federal Reserve on the recent supervisory stress test performed on Bank Alpha. The report notes that while Bank Alpha continues to build its capital levels and strengthen its ability to lend during periods of stressed market conditions, the bank's recent acquisition of a large regional competitor and its growing exposure to digital assets make it vulnerable under "severely adverse" scenarios. After discussing the stress test report, Bank Alpha's board of directors asks the CRO to critically review the bank's risk management practices. A summary of the CRO's findings is given below:

• Item 1: Bank Alpha applies a counterparty's marginal default probability and the correlation of its own credit spread with the counterparty's credit spread as key inputs in stress testing counterparty credit risk.

• Item 2: Bank Alpha incorporates scenario analysis in its capital planning process but only considers scenarios that lead to the quantification of risk.

• Item 3: Bank Alpha considers that contingency funding planning stress scenarios are independent of its liquidity stress scenarios.

• Item 4: Bank Alpha complies with the regulatory requirement in sharing information about cyber-security threats with peer banks to enable regulators effectively monitor and mitigate systemic risk.

Which of the findings reported by the CRO in relation to Bank Alpha's stress testing and scenario analysis is aligned with best practices?