What Is a Bank Stress Test? Meaning and Different Types

What Is a Bank Stress Test?

By Kristi Waterworth – Updated Sep 9, 2025 at 12:52 PM

Key Points

Bank stress tests evaluate a bank's crisis response using computer models and scenarios.
U.S. banks with over $50 billion in assets must undergo regular stress testing.
Test results influence customer and investor decisions about continuing bank relations.

Bank failures can be catastrophic. That's why bank stress tests are performed regularly. If you're wondering how bank stress tests work, read on to learn more.

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Various denominations of U.S. currency superimposed over one another in a pile. — Image source: Getty Images.

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Asset

An asset is a resource used to hold or create economic value.

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About the Author

Kristi Waterworth has been a contributing real estate and financial expert at The Motley Fool, covering real estate, investing, and personal finance topics, since 2020. Kristi has been interviewed by various TV media outlets and podcasts for her real estate investing expertise – from residential real estate to digital real estate and everything in between. Kristi’s journalist career spans over 25 years, and she has written about real estate investing, homeownership, and home construction specifically for the last decade. She was also previously a licensed Realtor and general building contractor before the Great Recession and housing market collapse. She holds a bachelor’s degree in American history from Columbia College in Missouri.

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