STRESS TESTING OF FINANCIAL INSTITUTIONS AND ITS IMPROVEMENT

In the turbulent global environment, dynamic transformations of the financial services market, regulators and management of financial institutions are constantly searching for tools for early detection of crisis phenomena at all levels of the financial system. In this regard, more and more attention are paid to stress testing, which allows to obtain an assessment of the degree of stress resistance of individual financial institutions and the financial system as a whole, their stability to crisis phenomena. The data obtained because of stress testing are the basis for the development and adoption of justified regulatory decisions at the micro and macro levels of the financial system by regulators and the management of financial institutions. The article highlights the actual theoretical and methodological issues of stress testing, aimed at identifying and analyzing the main goals and objectives achieved because of its implementation at the micro- and macro-levels of the financial system, as well as determining the main conditions and measures that will increase its effectiveness. It was determined that the management of financial institutions conducts stress testing to assess their own ability to withstand negative changes in endogenous and exogenous environments and to ensure the stability and viability of the business model in various stress scenarios. It was found that supervisory stress testing is divided into macro- and micro-prudential. In the case of macroprudential regulation, the purpose of stress testing is to prevent the growth of systemic risks of the financial system and to ensure its stability at the systemic level, rather than to avoid bankruptcies of individual financial institutions. If stress testing is implemented as an element of microprudential regulation, then the obtained results should prevent the growth of individual risks of financial institutions. During crises, the objectives of microprudential and macroprudential regulation are achieved together, as stress tests are used to determine the capital needs of financial institutions and are accompanied by regulatory actions to restore market confidence. The article identifies limitations that can reduce the quality of the obtained analytical data and the effectiveness of the application of stress testing results. On this basis, the main measures that will allow to improve this analytical technology are characterized.