# Reverse Stress Testing

*Risk & Portfolio — Finicade finance glossary*

Reverse stress testing starts from failure and works backwards: what set of events would make this firm non-viable? It's the antidote to ordinary stress tests, which choose scenarios management already finds plausible and therefore already survives. Regulators require it precisely because it forces attention onto the unimagined combinations — correlated shocks, funding withdrawal and a reputational hit arriving together.

**Also known as:** reverse stress test, break the bank test

**Related terms:** [Stress Testing](https://finicade.com/glossary/stress-testing), [Scenario Analysis](https://finicade.com/glossary/scenario-analysis), [Tail Risk](https://finicade.com/glossary/tail-risk), [Economic Capital](https://finicade.com/glossary/economic-capital), [Risk Appetite](https://finicade.com/glossary/risk-appetite)

Source: https://finicade.com/glossary/reverse-stress-testing