This course introduces the concept of Scenario Assumption Validation within the Credit Monitoring & Portfolio Surveillance framework. It focuses on evaluating the validity and reliability of assumptions used in stress testing and scenario analysis to ensure that risk assessments are realistic and well-founded.
Learners will explore key assessment dimensions such as control lapses, early warning signal identification, risk trend analysis, and proactive portfolio risk management, with an emphasis on independent validation and well-documented rationale. The course also distinguishes scenario assumption validation from broader credit management processes, highlighting its specific role in ensuring the accuracy and credibility of scenario-based risk evaluations.
By the end of the course, participants will understand how to validate scenario assumptions in practice, particularly within Stress Testing and Scenario Analysis, including validation of team-level analysis, approval of case recommendations, management of segment-level exposure, and escalation to the credit committee where required.