In the wake of the financial crisis and given the rising 5/7  BIS central bankers' speeches  frequency of destabilizing shocks to financial systems the world over, regulatory and supervisory systems have undergone significant improvements. The Bank has made important strides in the improvement of its regulatory and supervisory system.
One of the initiatives that the Bank has taken relates to stress testing of banks. This is a highly technical forward-looking exercise whereby the financial position of a bank is projected under a baseline scenario and an adversely stressed scenario. The objective is to examine if the bank has the financial muscle and strength to withstand shocks.