Adverse/Stress Scenario Definition

Purpose

Define clear adverse and stress scenarios by identifying relevant scenario families, benchmarking against existing scenarios, and grounding the selection with past events.

Primary users

Risk managers, stress testing teams, model risk stakeholders, and compliance/risk governance teams working cross-industry.

Where it fits (process/stage/trigger)

Used at the start of stress testing, ICAAP/ORSA-style exercises, risk appetite reviews, or when a new risk emerges and scenarios must be refreshed and approved.

Key capabilities / workflow

The agent identifies candidate adverse/stress scenarios, compares internal proposals to benchmark scenario sets, and links each selected scenario to relevant historical events to support plausibility and documentation quality before producing a consolidated scenario definition pack.

Inputs

Scenario objectives and scope, existing internal scenarios (if any), benchmark scenario libraries (if available), constraints (time horizon, severity, geography/portfolio), and a list of relevant past events or loss episodes.

Outputs / Deliverables

A documented set of adverse/stress scenarios with definitions, severity rationale, benchmark mapping notes, and supporting references to past events that justify why each scenario is credible and decision-ready.

Value

Speeds up scenario ideation and documentation, improves consistency versus benchmarks, strengthens governance with historical grounding, and reduces rework during review and approval cycles.