Multidisciplinary Journal of Science and Technology

THE IMPORTANCE OF STRESS TESTING FOR CAPITAL ADEQUANCY MANAGEMENT IN COMMERCIAL BANKS

Tojiboeva Nilufar Baxodirjon qizi

TSUE, basic doctoral student

Keywords: stress testing, banking capital, macroeconomic shocks, base and adverse scenarios, capital adequacy.

Abstract

This article examines the significance of stress testing as one of the key tools in capital adequacy management in the banking sector. The relevance of the topic is driven by the need to ensure the stability of commercial banks amid an unstable external environment and growing economic challenges. The paper analyses the main approaches to conducting stress testing, its objectives, methods, and its impact on managerial decision-making. Particular attention is paid to the necessity of implementing stress testing practices in Uzbek banks. The conclusion emphasizes the need for further development of stress testing as an element of strategic planning and enhancement of the financial stability of the national banking system.

References

1. Decree of the President of the Republic of Uzbekistan №5992 “About strategy of reforming the banking system of the Republic of Uzbekistan for 2020 – 2025” from 12.05.2020y.

2. Basel Committee on Banking Supervision. (2009). Principles for Sound Stress Testing Practices and Supervision. Bank for International Settlements.

3. International Monetary Fund (IMF). (2020). Financial Sector Assessment Program (FSAP) Methodology Documents.

4. Schuermann, T., & Kimball, R. (2015). Stress Testing Banks: Whence and Whither? Wharton Financial Institutions Center Working Paper.

5. Official website of the Central Bank of the Republic of Uzbekistan – www.cbu.uz