Text of this speech of 15 January 2025 follows in which Nathanaël Benjamin discusses BoE’s new approach to stress testing banks, and developments in stress tests of other parts of the financial sec­tor.

The proposals seek to aid market participants' and regulators' understanding of initial margin requirements and re­spons­ive­ness through increased transparency and cover hey cover aspects of CCP transparency, governance and review of initial margin models, as well as clearing member transparency for clients and CCPs.   BoE has published a note which supports the report’s findings and policy pro­pos­als.

The report sets out eight effective practices which aim to provide examples of how standards set out in the Principles for FMI, as supplemented by the relevant guidance, can be met.

The report explores the need to streamline variation margin processes in non-centrally cleared markets; and investigates the re­spons­ive­ness of initial margin models in non-centrally cleared markets.  It t sets out eight re­com­mend­a­tions to participants relating to variation margin processes; and the re­spons­ive­ness of initial margin mod­els.