Kuwait cbank says 2nd stress test inadequate

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The Central Bank of Kuwait has told local banks that many of the procedures they have used to carry out their second stress test were inadequate, Kuwait-based Al-Rai daily reported on Thursday.

Most of the scenarios assumed by the banks were not tough and challenging enough, the paper reported, citing a circular to local banks issued by the central bank on Wednesday.

As a result, the stress tests lead to the wrong conclusion that the worst-case scenario does not represent a significant threat to the banks and consequently can be easily faced in real life situations, the paper reported.