It is thus important that financial institutions build up resilience to be able to absorb both internal as well as external shocks. Many regulators have made stress testing an integral component of the capital planning exercise for financial institutions. The Bank of Mauritius has recently developed stress testing models to independently assess the resilience of banks to shocks, both at macro and micro levels.
Since 2007–08, both the CP and CD volumes have also increased very significantly (Chart 3). Furthermore, issuance of 91-treasury bills has also increased sharply (Chart 4). The overall money market now is much larger relative to GDP than a decade ago.