HKMA’s revised IC-5 Stress-testing raises the bar for stress testing among Hong Kong’s Authorised Institutions. This regulatory overhaul pushes AIs to build comprehensive, enterprise-wide stress-testing programmes tailored to their risk profiles, marking a critical shift from passive compliance to active risk governance.
The updated requirements focus on four key areas:
- reinforced board-level governance and clear accountability
- integrated firm-wide stress-testing methodologies with rigorous scenario design
- upgraded data and technology infrastructure to support end-to-end testing workflows
- and a tighter linkage between stress test results and risk appetite as well as remedial actions
By proactively adapting to the new IC-5 rules, AIs can turn regulatory obligations into competitive strengths. A mature stress-testing system enables early risk detection, enhances crisis resilience, and underpins robust risk management amid volatile markets.
