Stress Testing

    In order to promote resilience and transparency of the financial sector, the National Bank of Georgia, along with other instruments, imposes capital adequacy requirements to commercial banks. If different risks are realized, these requirements are expected to absorb losses and help banks to continue their operations both during normal and stress periods.


    Capital requirements for commercial banks are determined according to the Basel III framework, one of the components of which is the net stress test buffer. This implies setting sufficient capital requirements for stress periods. The stress test methodology manual (available in Georgian) describes the rule for determining net stress test buffer requirement, underlying scenario, assumptions and approaches to individual risks.