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Abstract
The activities of large, internationally active financial institutions have grown increasingly complex and diverse in recent years .the increasing complexity has necessarily been accompanied by a process of innovation in how these institutions measure and monitor their exposure to different kinds of risk. one set of risk management technique that has attracted a great deal of attention over the past several years ,both among practitioners and regulators ,is “stress testing “,which can be loosely defined as the examination of the potential effects on a firms’ financial condition of a set of specified changes in risk factors ,corresponding to exceptional but plausible events.