Scenario analysis vs stressing models

patso

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This is what I understand: stress testing is divided into:
A. Scenario Analysis
B. Stressing models
Stressing models can be further divided into Factor push, Max loss optimisation, and Worst case scenario.
However what im failing to understand is the between scenario analysis and stressing models in general.
To me, stressing models measure the effects of changing factors on a model which is in essence scenario analysis (putting the model through different scenarios and observing the impact). Further “worst case scenario” is considered stressing model and not a scenario, yet this sound like a scenario analysis under worst case conditions.
Is this semantics:)
 
This passage from the book explains the difference
Given the difficulty in estimating the sensitivities of a portfolio’s instruments to the scenarios we might design, another approach might be to use an existing model and apply shocks and perturbations to the model inputs in some mechanical way. This approach might be considered more scientific because it emphasizes a range of possibilities rather than a single set of scenarios, but it will be more computationally demanding. It is also possible to glean some idea of the likelihood of different sce- narios occurring.
 
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