Application of stress test models in risk management
Subject Areas : Journal of Investment Knowledge
1 - Ph.D. student of financial management, financial engineering, Yazd University, Faculty of Economics, Management and Accounting.
Keywords: Stress test, management risk, Scenario analysis,
Abstract :
Financial networks are potential channels for the propagation of crises shocks which are considered as the main factor for systematic stability. The term stress test refers to different techniques and methods used to assess the impact of events or combinations of events, which may occur normally for business units. The methodology of this research is based on historical cognitive method through library method and aimed at knowledge development using scientific resources such as books and articles. In this study, after a short review on the application of stress tests in different researches, we will study the different aspects of the application of stress tests, then we deal with the steps to apply stress tests in risk management using different charts and diagrams. Then we will introduce variety of different methods to run stress tests and will explain the advantages and disadvantages of stress tests, and finally we will offer some recommendations regarding the implementation of this method.
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