The term “stress” rarely brings positive images to mind. But did you know that stress is a natural physical response that results in greater stamina in difficult situations? Doctor Hans Selye was the first to discover that stress is not purely negative. Stress researchers even suggest that we need a healthy dose of stress for our development and well-being. However, for people to reap the benefits of stress, they must learn to handle it properly.
So what does the term “stress” mean for banks?
“Banking supervision” includes a number of tools that serve as early detection systems for future scenarios. One of these tools is a stress test that projects a possible, but not actual, capital market development. The bank stress test (also known as the banking stress test) is a risk management term. It uses scenarios to depict the corporate risk to financial institutions or insurance companies, so that they can take action in due time and launch measures to enhance risk capacity. The stress test can be used by institutes themselves or an external supervisory committee such as BAFIN to determine whether they could withstand a potential capital market crisis.
This year, as part of the banking supervision programme, the European Central Bank (ECB) will monitor 128 banks in the euro zone. In this context, it will conduct balance sheet audits and stress tests. Germany is home to 24 of these banks – more than any other country.
Due to these strict controls, EVS Translations anticipates a large volume of communications needs among international medium-sized and large banks before, during and after the audit phase.
As a professional translation service for 120 listed companies, CPAs and 11 of the banks to be audited in Germany, EVS Translations is directly involved in the communications process.
