The Center for Financial Professionals interviewed Andrei Egorov, MD, Risk Analytics/ Stress Testing at Charles Schwab. We discuss the gains and losses for institutions on the verge of the crossover between DFAST to CCAR. Andrei will be sharing his further knowledge about this change in our Stress Testing USA: DFAST Edition congress.
- Andrei, can you tell Center for Financial Professionals’ readers a little bit about yourself and your professional experience?
I’ve been in the financial services industry in the U.S. for more than 15 years. If you include my banking experience back in Moscow and the time that I spent earning my masters in Economics and Finance that would sum up to about 25 years of “living and breathing” finance. Most of my professional career I spent on the ALM/IRR side and, as many others with my background, got pulled into stress testing about 4 years ago. I’ve worked in companies of various sizes and types – including banks, credit unions, and broker/dealers. I’ve been with Charles Schwab since 2008, working on stress tests since 2011.
- At our Stress Testing USA: DFAST Edition you will be discussing institutions on the verge of crossover from DFAST to CCAR, can you give a brief overview of the effect of the crossover?
Regulatory expectations of CCAR institutions are obviously quite higher in such areas as data governance, model governance, sophistication of estimation practices, design of internal scenarios, size and frequency of filings, public disclosures, and Board involvement
- How can an organization prepare for the crossover and the additional regulatory requirement?
An organization will most likely have to make investments in additional resources, systems, enhance processes and controls, and make sure an appropriate risk culture is in place.
- How do you foresee Stress Testing requirements (DFAST & CCAR) changing in the next couple of years?
There is a lot of talk about CCAR-365 – stress testing is likely to become a year-round process and everything within an organization might be looked at and evaluated through the prism of CCAR process.
