Abstract: the article examines stress testing as a tool for managing banking risks in terms of assessing risk exposure, as well as a tool for supervision, anti-crisis and prudential policies. A description of the typology of microprudential and macroprudential stress testing is given, their features are given. The advantages and disadvantages of applying the stress testing method both for commercial banks and for the regulator are evaluated. Four key elements of stress testing are highlighted, which are present regardless of the micro or macro level. The possibility of using both univariate and multivariate stress tests is considered. The issue of publicity of the results of stress testing was raised. Stress testing is critical to maintaining financial stability, but for it to be useful, it must not only have a global focus, but also involve financial authorities, bank executives and academia in developing rigorous scenarios for this promising risk management approach.
The main conclusions can be used in the development of a risk management system, in terms of the introduction of modern tools for assessing various risk factors, as well as in the implementation of regulation at the micro and macro levels of the country’s financial system.
Keywords: stress testing; bank; management of risks; systemic risk; financial stability; risk assessment; prudential regulation