Sudanese Banking Sector and Stress Testing

The repercussions of the 2008 Global Financial Crisis helped to reconsider foundations used in assessing banks’ withstand potential crises. In 2009, BCBS issued a document entitled “Principles for Sound Stress Testing Practices and Supervision” as basis early evaluation performance banking institutions their ability overcome sudden shocks study aims examine Sudanese Banking Sector pass stress testing shock light Basel II standards test. methodology was based on analyzing Sudan's economy, consolidated balance sheet, financial soundness indicators sector (2005-2021). Additionally, it scenario designed reverse (2022-2025). results show that failed bear due its lack commitment applying supervisory II. war broke out state Khartoum April 15, 2023, led deterioration political economic conditions. It is expected reduce sector's power absorb shocks. paper recommends Central Bank Sudan follow up banks apply recommended by II, especially capital adequacy, liquidity requirements, risk. Furthermore, implementation contractionary monetary policies serves inflationary pressures, which helps avoid credit market risks.