By Regan Camp, Vice President of Portfolio Risk Sales and Services, Abrigo For some banks, stress testing is simply an annual exercise that often follows this pattern: run a scenario, summarize the results for leadership and file the materials. I’ve personally seen stress testing decks that come out once a year, usually right before a meeting, and then disappear until the next cycle — untouched, unquestioned and slightly out of date. This pattern made sense when stress testing served primarily as documentation, but today, regulators expect answers to a specific management question: What should the bank do differently because of what the test revealed? The OCC’s 2026 Comptroller’s Handbook states that “all banks can benefit from applying stress testing to their loans and portfolios.” It also emphasizes asking plausible “what if ” questions and incorporating the results into broader risk management processes. Increasingly, examiners and auditors are looking for a clearer connection between portfolio-level results and what’s actually happening within the loan portfolio. They want insight into where losses originate, which segments are most sensitive to changing conditions and how risk migrates as the environment deteriorates. As a result, when presentations of portfolio-level stress testing results start to sound a little too high level, you might see an examiner, auditor or even someone on the institution’s own risk team lean forward and ask, “Okay … but which loans actually Stress Testing Should Shape Decisions, Not Just Document Risk 19
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