01979cas a2200253 a 4500 AALejournalIMF006575 230101c9999 xx r poo 0 0eng d 5.00 USD 9781455201396 1018-5941 BD-DhAAL BD-DhAAL Cihak, Martin. Of Runes and Sagas : Perspectives on Liquidity Stress Testing Using an Iceland Example / Martin Cihak, Li Ong. Washington, D.C. : International Monetary Fund, 2010. 1 online resource (28 pages) IMF Working Papers <strong>Off-Campus Access:</strong> No User ID or Password Required <strong>On-Campus Access:</strong> No User ID or Password Required Electronic access restricted to authorized BRAC University faculty, staff and students The global financial crisis revealed weaknesses in the stress testing exercises performed on financial institutions and systems around the world. These failures were most evident in the area of liquidity risk, where now-obvious vulnerabilities were left largely undetected, with stress tests having largely focused on solvency risk. This paper uses publicly available data from a now-defunct bank in Iceland, where liquidity shocks were immense, to demonstrate how a combination of stress tests of the various risks would have provided a clearer picture of existing vulnerablities. We show that, ultimately, stress test models do not necessarily need to be complex or overly sophisticated. Basic stress tests, using appropriate assumptions and shocks, could reveal key areas of risk to inform contingency planning. The liquidity stress test templates used in this paper are included. Mode of access: Internet Ong, Li. IMF Working Papers; Working Paper ; No. 2010/156 Full text available on IMF http://elibrary.imf.org/view/journals/001/2010/156/001.2010.issue-156-en.xml IMF e-Library