First, a risk assessment, which will identify broad risk factors, including funding and liquidity risks. Second, a balance sheet assessment, which will review asset quality using calculation, qualification and valuation checks of a broad risk-based nature, with central quality assurance according to a common methodology. This will draw on the expertise of external consultants.
Third, a stress test, which will apply the results to an adverse scenario. The linkages between the balance sheet assessment and the stress test still need to be defined in detail. What is clear, however, is that both are communicating vessels. If the former is a more thorough point-in-time stock-taking, then the later has to contain more forward looking elements.