Training Program

IMF desk economists and officials working on financial stability in central banks or other supervisory authorities.

Participants are expected to have experience with financial stability analysis.

This course, delivered by Monetary and Capital Markets Department (MCM) staff, teaches stress testing for banks and nonbanks, such as insurance companies and mutual funds. While the course touches upon microprudential stress testing, it focuses on macroprudential stress testing and systemic risk. The course reviews stress testing objectives, methodologies, scenario design, and techniques. It gives participants an opportunity to learn tools used by MCM in the Financial Sector Assessment Program and technical assistance missions. As regards banks, the course focuses on credit and market risks, liquidity risk, contagion analysis, interactions between these risks, and feedback loops between real and banking sectors. Emerging risks—such as those related to climate change, cyber, and fintech—are also covered. As regards nonbanks, the course presents the main elements of stress testing for insurance companies and mutual funds, and shows how nonbanks can give rise to systemic risk. Communicating of stress test results, and incorporating them in policy decision making, including calibration of macroprudential policy, is discussed as well. External participants are encouraged to exchange knowledge and share country experiences.