Advice for gathering loan portfolio stress testing data
This video is a segment taken from a recent webinar, hosted by Sageworks. For the full recording, visit “Stress Testing the Loan Portfolio.”
One of the biggest challenges in successfully stress testing the loan portfolio is bringing together and continually updating the loan-level data needed for stress testing. Even in top down stress tests, loss rates have to be justified and documented.
Much of the data needed for stress testing can be found in the bank’s core processing system, including loan balance, risk rating and interest rates. Unfortunately, much of the data is not included in that system: updated appraisal values, other cash flow information, net operating income, etc. This data is often stored in the loan files rather than a central data source.
In order to tackle this challenge initially, there are a few steps institutions can take.
To learn more, download this whitepaper, Stress Testing: Who, What, When and Why. Or, watch a demo to see how financial institutions use Sageworks Stress Testing to systematize their data collection and analysis.
