Capital & Liquidity Stress Testing, Contingency Funding & Recovery Planning Masterclass
A bank can meet every regulatory ratio today and still be vulnerable tomorrow. Resilience is knowing how fast buffers erode, how long liquidity survives — and which recovery actions are actually credible.
Format
Classroom
Upcoming sessions
Pick a session to applyADMISSIONS OPENThe programme
Banks rarely face capital, liquidity and funding stress in isolation. Credit deterioration weakens earnings and capital while deposit withdrawals drain liquidity, market disruption closes refinancing channels and FX or interest-rate shocks hit all of them at once — and frameworks that test each risk separately understate how fast resilience erodes. This intensive two-day masterclass connects capital stress testing, liquidity stress testing, scenario analysis, early warning indicators, contingency funding planning and bank recovery planning into one integrated stress-to-recovery framework. Participants translate severe-but-plausible scenarios into impacts on CET1, RWA, LCR/NSFR, profitability and funding; calculate liquidity survival horizons; design early warning indicators and recovery triggers; build and test a Contingency Funding Plan; and quantify recovery options and overall recovery capacity — asking throughout whether each action remains executable when markets are stressed. Anchored in Basel III, ICAAP and ILAAP supervisory expectations and reverse stress testing, and jurisdiction-neutral by design. Delivered in English and French across the Middle East, Africa and Asia, and in-house for individual institutions.
What you will do
Who attends
- Chief Risk Officers, Chief Financial Officers and heads of risk and finance
- Treasury, ALM, capital management and liquidity & funding risk teams
- Stress testing, ICAAP, ILAAP and recovery & resolution planning specialists
- Market risk, credit risk, regulatory reporting and prudential risk functions
- Internal audit, compliance, financial control and strategy teams
- Highly relevant for ALCO and Risk Committee members and senior executives who own financial resilience
Programme agenda
Stress → Survival → Action → Recovery: the full lifecycle, worked end to end
I.The integrated stress-testing framework — why capital, liquidity and funding stress must be tested together
- Regulatory versus internal management stress testing — and what each is for
- Identifying material vulnerabilities and transmission channels across the balance sheet
- Translating risk appetite into stress-testing thresholds
- Governance, ownership and independent challenge
II.Scenario design & calibration — building severe-but-plausible shocks that are actually defensible
- Macro-financial construction: GDP, inflation, rates, FX, credit deterioration and NPL migration
- Deposit runoff, funding disruption, sovereign, counterparty and concentration shocks
- Correlated and compound scenarios — historical versus hypothetical, severity versus plausibility
- Hands-on: building a combined capital-and-liquidity stress scenario
III.Capital stress testing — from credit deterioration to CET1, buffers and the capital plan
- Stressing PD, LGD, EAD, portfolio migration and RWA under deteriorating conditions
- Earnings under stress and capital depletion pathways — CET1, Tier 1 and total capital
- Management thresholds, buffers and capital restoration capacity
- Linking stress results into ICAAP and strategic capital planning
IV.Liquidity stress testing & survival analysis — how long the bank actually survives a funding shock
- Behavioural cash flows: deposit segmentation, runoff assumptions, retail versus wholesale behaviour
- Large-depositor and concentration shocks, market-access loss, collateral calls and haircuts
- Counterbalancing capacity, asset monetisation and intraday and contingent liquidity
- Hands-on: calculating liquidity gaps, the survival horizon and the point of exhaustion
V.Contingency funding planning — a CFP that works when the market does not
- Liquidity early warning indicators, escalation levels and activation thresholds
- Funding sources: central bank facilities, repo and asset sales, collateral mobilisation, deposit retention and pricing
- Capacity, execution time, operational constraints — and whether sources survive systemic stress
- Hands-on: building the CFP escalation framework and testing funding-source availability
VI.Recovery planning, triggers & recovery capacity — knowing when to act and what each action is worth
- Recovery indicators across capital, liquidity, asset quality, profitability and markets — quantitative and qualitative triggers
- Recovery options: capital raising, deleveraging, disposals, liability management, cost and dividend measures
- Impact, timelines, feasibility, constraints, interdependencies — and Overall Recovery Capacity
- Hands-on: designing recovery triggers and quantifying and ranking recovery options
VII.The Stress-to-Recovery Lab — one severe combined scenario, followed from first shock to restored resilience
- The scenario: credit deterioration + deposit outflows + market disruption + FX and rate pressure + reduced funding access
- The chain: initial shock → capital impact → liquidity outflow → EWI breach → survival-horizon reduction → CFP activation → recovery trigger → option selection → restoration
- The hard questions: which indicator warns first, when to escalate, what each action restores and how fast
- The systemic twist: what happens when several banks attempt the same recovery action at once — and when the Board and the regulator must be involved
Frequently asked
What is capital and liquidity stress testing?
Capital and liquidity stress testing assesses how severe but plausible economic, financial and institution-specific shocks would affect a bank’s capital adequacy, liquidity position, funding capacity, profitability and overall resilience. This masterclass tests them together — because in real stress, credit losses, deposit withdrawals and funding-market closure arrive at the same time, and siloed tests understate how fast resilience erodes.
What is a Contingency Funding Plan in banking?
A Contingency Funding Plan (CFP) defines the funding sources, escalation procedures, responsibilities and management actions a bank activates when normal funding conditions deteriorate. The programme covers the full architecture — early warning indicators, activation thresholds, central bank facilities, asset sales and repo capacity, collateral mobilisation and deposit actions — with particular emphasis on testing whether each source actually remains available during systemic stress.
What is a liquidity survival horizon?
The liquidity survival horizon estimates how long a bank can keep meeting its payment and funding obligations under a defined stress scenario before available liquidity is exhausted or minimum thresholds are breached. Participants calculate survival horizons hands-on — from behavioural deposit runoff and funding concentration through counterbalancing capacity to the point of liquidity exhaustion.
How does stress testing connect to bank recovery planning?
Stress testing identifies the circumstances under which capital, liquidity or other financial indicators could deteriorate materially; recovery planning establishes the triggers, governance and management actions that restore the institution’s position when they do. The masterclass works the full chain — recovery triggers linked to capital and liquidity deterioration, recovery options quantified for impact, speed and feasibility, Overall Recovery Capacity, and reverse stress testing to find the scenarios that threaten viability.
Who should attend, and can the programme run in-house?
The programme is built for Risk, Finance, Treasury, ALM, capital management, liquidity risk, stress testing, ICAAP/ILAAP, recovery planning, regulatory reporting and internal audit professionals, and for ALCO and Risk Committee members. BIZENIUS delivers it in English and French on a rolling calendar with dates confirmed on request; an in-house edition can be tailored to the institution’s balance sheet, funding structure, risk appetite and recovery framework. Fees and quotations on enquiry.
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In their words
Knowledge transfer, emphasised throughout
“We worked with BIZENIUS for our Fresh Graduates Programme — they are simply amazing. Knowledge transfer and practical learning were emphasised throughout.”
Kuwait Investment Authority
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