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OCC Bulletin 2012-14 | May 14, 2012

Stress Testing: Interagency Stress Testing Guidance


Chief Executive Officers of All National Banks, and Federal Savings Associations Department and Division Heads, All Examining Personnel, and Other Interested Parties


The Office of the Comptroller of the Currency, the Board of Governors of the Federal Reserve System, and the Federal Deposit Insurance Corporation (agencies) are jointly issuing Supervisory Guidance on Stress Testing for Banking Organizations with Total Consolidated Assets of More Than $10 Billion. This joint interagency guidance outlines high-level principles for stress testing practices, and is applicable to all OCC-supervised, Federal Reserve-supervised, and FDIC-supervised banking organizations with more than $10 billion in total consolidated assets. The agencies, in a joint statement issued simultaneously with this guidance, are clarifying that community banks and thrifts with assets of $10 billion or less are not required or expected to conduct the types of stress testing articulated in the attached document.1


The U.S. federal banking agencies have previously highlighted the use of stress testing as a means to better understand the range of a banking organization’s potential risk exposures. The recent financial crisis further underscored the need for banking organizations to incorporate stress testing into their risk management, as banking organizations unprepared for stressful events and circumstances can suffer acute threats to their financial condition and viability. This guidance highlights the importance of stress testing as an ongoing risk management practice that supports a banking organization’s forward-looking assessment of its risks. It outlines broad principles for a satisfactory stress testing framework and describes the manner in which stress testing should be employed as an integral component of risk management. While the guidance is not intended to provide detailed instructions for conducting stress testing for any particular risk or business area, the guidance aims to describe several types of stress testing activities and how they may be most appropriately used by banking organizations.

This guidance is intended to be consistent with industry practices and with international supervisory standards. The guidance does not implement the stress testing requirements imposed by the Dodd-Frank Wall Street Reform and Consumer Protection Act. The Dodd-Frank Act’s stress testing requirements are being implemented through separate notices of proposed rulemaking by the respective agencies.

Further Information

Questions about the guidance can be directed to Darrin Benhart, Deputy Comptroller, Credit and Market Risk, at (202) 649-6394; Robert Scavotto, Lead International Expert, International and Banking Condition, at (202) 649-5477; Tanya Smith, NBE, Lead Expert for Regulatory Capital and Operational Risk, Large Bank Supervision, at (415) 765-2485; Akhtarur Siddique, Deputy Director, Enterprise Risk Analysis Division, at (202) 649-5526; or Alexandra Arney, Attorney, Legislative and Regulatory Activities Division, at (312) 360-8830. Send comments or inquiries to the Office of the Comptroller of the Currency, 400 7th Street SW, Washington, DC 20219.


John C. Lyons
Senior Deputy Comptroller for Bank Supervision Policy
And Chief National Bank Examiner

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