ADIs conduct stress tests to ensure they can maintain liquidity should extreme events occur.

Question

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ADIs (Authorized Deposit-taking Institutions) are required to conduct stress tests to assess their ability to maintain their liquidity and solvency during adverse scenarios such as economic downturns, market shocks, or credit risks. This helps ensure that they can meet the demands of customers and creditors even in times of financial stress.

ADIs Conduct Stress Tests to Ensure They Can Maintain Liquidity