Finance

The Stress Test

A 90-minute, 4-round advanced Express simulation on supervisory stress testing and bank capital planning, for courses in bank management, financial institutions, risk management and corporate finance.

4 rounds Executive English, Español

Preview

About this simulation

A 90-minute, 4-round advanced Express simulation on supervisory stress testing and bank capital planning, for courses in bank management, financial institutions, risk management and corporate finance.

Merrow Valley Bancorp (a fictional Category IV regional bank in Columbus, Ohio, with 118 billion dollars of assets): as CFO you run the 2028 capital-planning cycle against the stress capital buffer the Federal Reserve sets with its own models.

You decide the stress scenario and how office loan losses are projected, the dividend and the buybacks in the capital plan, the answer to the Fed number and the gap between your models and the supervisor, and the distributions and balance sheet when office loans default.

Scored on the headroom over the requirement, the capital returned net of market reactions, the accuracy of your own projection, supervisory findings and net income.

Who it is for

An advanced simulation for participants used to working with the main frameworks and trade-offs of the subject, designed for executive education and experienced professionals.

How a session runs

  1. The instructor creates a session from the Eureka dashboard and invites the participants.
  2. Participants play 4 rounds. In each one they submit their decisions and the simulation calculates the results. The first round opens with: Monday 14 February 2028: the scenarios are out.
  3. The simulation can be run in English, Español.
  4. The instructor follows each participant's progress and results from the dashboard, and uses the class results for the debrief.

Decisions participants make

The decisions participants make during the simulation:

  • The scenario the capital plan is built on
  • How the office losses are projected
  • Quarterly dividend from the third quarter
  • Buybacks, July 2028 to June 2029
  • The answer to the Fed’s buffer
  • The gap between your models and the Fed’s
  • Distributions for the fourth quarter and the first half of 2029
  • The balance sheet to June 2029

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