Regulatory Alerts2008-10-24
South African Reserve Bank Guidance Note 9/2008 on Stress Testing
The South African Reserve Bank issued Guidance Note 9/2008 to clarify regulatory expectations for stress testing by banks and controlling companies under the Banks Act. The document distinguishes between Pillar 1 IRB credit risk stress tests and Pillar 2 ICAAP scenario-based tests regarding their objectives, severity, time horizons, and management actions. It emphasizes that while the regulator provides high-level guidance, banks retain full responsibility for determining stress scenarios appropriate to their specific business profiles and risk exposures.
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