[CCWG-ACCT] Revised Stress Tests 29 and 30

[Malcolm Hutty]

On 17/10/2015 02:22, Greg Shatan wrote:
> All,
>
> As discussed during yesterday's F2F session, I attach proposed
> revisions to Stress Tests 29 and 30.

Dear Greg,

I think you have misunderstood how the Stress Tests are constructed.

The Stress Tests exist to test whether our proposal is sufficiently
robust to preclude certain identified adverse outcomes from materialising.

The Stress Tests therefore posit that feared adverse outcome, together
with a presumed set of circumstances that it could be feared might bring
that outcome about. These circumstances, and the adverse outcome being
tested, are recorded in the first and second boxes respectively.

The current arranagements and our proposal is then inspected for
measures (safeguards) that are relevant to precluding that adverse
outcome from materialising. Those relevant measures are to be recorded
in the boxes marked "existing accountability measures" and "proposed
accountability measures, respectively. Finally, the adequacy of those
measures as a means of avoiding the feared outcome is assessed, and the
conclusion of that assessment is recorded in the box marked "conclusion".

This is the way all the stress tests have been structured.

Accordingly, while we might refine the presumed circumstances, it is the
feared outcome that remains constant: it is the adequacy of the measures
at precluding the outcome from materialising that is being tested.

In your draft you use the box marked "outcome" for the conclusion (i.e.
you are using to show the actual outcome you expect to result, rather
than the feared outcome being tested). This is inconsistent with the
construction of the stress tests.

Unfortunately your drafting therefore omits mention of what is being
tested, and for this reason is unsuitable for acceptance as a stress
test. If you would like to redraft and resubmit, please revert the
"Outcome" being tested to the original. Following the methodology above
will help you to remain consistent with the rest of the suite of stress
tests.

Malcolm.

P.S. I am copying the stress test working party mailing list. I suggest
that for the convenience of CCWG any follow-up discussion be moved to
the ST-WP list only.

On 17/10/2015 02:22, Greg Shatan wrote:
> All,
> 
> As discussed during yesterday's F2F session, I attach proposed revisions
> to Stress Tests 29 and 30.  Please note that I split Stress Test 29 into
> two parts, since the two paragraphs of the ST29 posed different issues
> with differing answers.
> 
> I followed the limitation set by the Stress Test Working Party that the
> text of the "Stress Test" fact statement should not be changed.
> 
> I look forward to comments.
> 
> Greg
> 
> 
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> 

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