The AQR will ensure that the following stress test will be based on clean data, thus avoiding the weakness of the previous stress tests, in which the calculations were based on exposures valued only by the bank concerned. The use of common valuation standards will improve comparability, and the examination carried out by supervisors will add to the credibility of the exercise.
The stress test adds a forward-looking element. It will focus on the resilience of these balance sheets to certain shocks to the economic and financial system. Both elements will come together, as the results of the AQR will feed into the stress test.