Half of banks use scenarios to set third-party Pillar 2 capital

A recent Risk Benchmarking study reveals that around half of banks are using hypothetical scenarios to determine their third-party Pillar 2 capital requirements. This approach is more formalized compared to coverage for cyber and IT disruptions, highlighting a growing focus on resilience risks. The study underscores the importance of scenario planning in enhancing financial stability, suggesting that banks are increasingly recognizing the need for robust risk management strategies in an ever-evolving financial landscape. This trend could lead to more resilient banking systems better equipped to handle unforeseen challenges.