Question 92

The Basel Committee on Banking Supervision has written stress testing principles for banks regarding the implementation of stress testing. How many of the following statements are most likely correct regarding these principles?

I. Stress testing models, results, and frameworks should not be subject to challenges.
II. Stress testing frameworks should have clearly articulated and formally adopted objectives.
III. Stress testing practices and findings should be communicated within and across jurisdictions.
IV. Stress testing frameworks should capture material and relevant risks and apply stresses that are sufficiently severe.