Despite these advances, there is continuing need for improvement in the firms’ capital planning processes. Some firms still lack reliable information about their businesses and exposures. Firms also are sometimes unable to measure or understand how stressful conditions can change the performance of their material business lines.
In particular, the capacity to assess the impact of tail risks remains in need of further development at many firms. These deficiencies are, in some instances, compounded by weak oversight by senior management and boards of directors, and lack of effective checks and accountability in the process.