The extensive range of activities now subject to oversight reflects their potential impact on financial stability and their links to the smooth conduct of monetary policy. Central banks are organised so that their operational role in payment systems does not conflict with their oversight role.
Since 2013, stress testing has been used to assess banks' capital positions and determine whether they have sufficient capital to both absorb losses and continue lending during stressed conditions. This process has evolved considerably since its inception, and that evolution is important to ensure that stress testing continues to be relevant and effective.