Oracle Financial Services Software has released an integrated, enterprise-wide stress-testing solution to help financial services institutions gain a holistic view of risk and comply with the Internal Capital Adequacy Assessment Process requirements under Pillar 2 of the Basel II accord.

Delivered using Oracle Reveleus Advanced Analytics Infrastructure, the stress testing solution enables institutions to centrally develop, define, and manage scenarios and shocks—and apply them across multiple-risk categories including credit risk and market risk—to help provide a transparent and auditable means of performing regulatory and economic capital estimation.

As the recent financial crisis unfolded, institutions and regulators realized that stress testing can no longer be carried out solely within the traditional siloed risk disciplines, but must address the interconnected nature of these risks and their combined impact on the overall capital adequacy of a bank. "There is unprecedented regulatory pressure on financial institutions to comply with enterprise stress-testing requirements and ensure that the lessons of the financial crisis have been learned and will not be repeated,” S. Ramakrishnan, CEO of Oracle Reveleus and Oracle Mantas products, Oracle Financial Services Software, said.

The stress-testing solution enables institutions to overcome the recently exposed flaws in the traditional, siloed approach to stress testing by enabling banks to share and reuse their existing, calibrated risk models with shocks and stress scenarios that are common and consistent across the entire enterprise, thereby providing a holistic approach for stress-testing management.