Reviewing the 2016 CCAR & DFAST stress tests and looking towards 2017

Reviewing the 2016 CCAR & DFAST stress tests and looking towards 2017

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Please tell us a little bit about yourself and your professional experience?

 

Priyotosh is a Managing Director with JPMorgan Chase and the Head of Firmwide Central Challenger Team and Finance Calculation Independent Review (FCIR). Prior to joining JPMorgan, Priyotosh served as the CFO of the direct deposit business at Capital One overseeing over $90B in deposits and $1.5B in assets under management. He has over 18 years of experience in the areas of Corporate Finance, Forecasting, Risk Management, Asset Liability Management, Product Development and Management Consulting. Priyotosh holds an MBA from the INSEAD/Wharton program and has an Engineering (Honors) degree from the Indian Institute of Technology (IIT), Kharagpur.

 

At the Center for Financial Professionals Stress Testing USA: CCAR & DFAST Congress, you discussed the 2016 CCAR &DFAST stress tests and looking ahead to 2017, what would you say is the top lesson each of you learnt for 2016?

 

  • Consistent, repeatable and well supported methodologies are imperative to both quantitative and qualitative results of stress testing
  • Nimble yet effective governance and challenge processes to manage through non traditional stress scenarios
  • Expanding definition of Models

 

Can you please give our readers a brief summary of the 2016 scenarios and the curve balls that were included in the tests for this year?

 

Negative interest rates

 

How can financial institutions better prepare for 2017 tests and use lessons learnt from 2016 to better prepare for uncertainties?

 

Continue to work on the items identified in Q1

 

Stress Testing remains a huge talking point across the industry, in terms or regulatory expectations and changes, do you see this trend continuing around uncertainties in preparation, or is there light at the end of the tunnel?

 

Stress Testing has clearly evolved into the key regulatory tool to assess capital adequacy, and expectedly the bar keeps moving higher and higher. With ongoing changes to regulations, capital standards and reporting requirements, it is expected that Stress Testing will continue be a key topic of discussion for the foreseeable future.

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