As I have mentioned, unlike traditional examinations focused on individual banks, the assessment process specifically incorporated cross-firm and aggregate analyses of a set of firms that constitute a majority of the banking system. This approach allowed a broader analysis of risks than is possible within the traditional supervisory focus on individual institutions.
Supervisors evaluated loss rates for similar portfolios using consistent data and metrics, allowing them to identify outliers and more effectively evaluate the quality of individual firm estimates. The process was an iterative one, with both the firms and supervisors conducting sensitivity analyses around key assumptions.