RTS: Supervisory shock scenarios and modelling (Directive 2013/36/EU)

This regulation provides detailed technical rules for how financial supervisors test the resilience of banks. It defines the 'shock scenarios'—simulated economic crises—and the mathematical assumptions used to determine if a bank has enough capital to survive a severe financial downturn.

This affects large banks and credit institutions, as well as the regulatory bodies that supervise them. It ensures a consistent approach across the EU when measuring financial risk and defining what constitutes a 'large decline' in asset values.