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Compares optimum constant‐stress and simple step‐stress ALTs for the Weibull distribution. The purpose is to quantify the advantage of using step‐stress testing in comparison to constant‐stress testing when censoring is likely to occur at the lower levels of stress. Assumes that a log‐linear relationship exists between log scale parameter and stress and that the cumulative exposure model holds for the effect of changing stress in step‐stress test. The variance of the MLE of log scale parameter at design stress is used as the criterion for comparing ALTs. The efficiency of simple step‐stress tests relative to constant‐stress with Type I censoring is studied in terms of the ratio of these variances. Results are given for asymptotic variances and for finite sample sizes using simulation to estimate variances.

As stated in general terms in a previous paragraph, in the ease of this material the following complex stress relaxation tests were made: two pure torsion tests from initial stresses of 4 tons/sq. in. and 3 tons/sq. in.; two tests having a stress ratio T/S=0·4 and having initial stress values of T=1·6, S=4 and T=1·2, S=3 tons/sq. in. in the two cases; two tests having a stress ratio T/S=0·8 and having initial stress values T=3·2, S=4 and T=2·62, S=3·28 tons/sq. in. respectively; and finally one test having a stress ratio T/S=1·5 and having an initial stress value T=4·5 and S=3 tons/sq. in. (i.e. a total of seven tests).

This paper aims to reproduce the electrical connector intermittent fault behaviours with step-up vibration stress while maintaining the integrity of the product.

A dynamic model of an electrical connector under vibration is established for contact resistance analysis. Next, the dynamic characteristics of contact resistance are analysed, and cumulative damage theory is used to calculate the damage under different stresses during the intermittent fault reproduction test. To reduce damage and improve efficiency, the step-up stress is used for the reproduction test.

The proposed method can reproduce the intermittent fault behaviour, and the step-up stress test is more efficient than the constant stress test.

Step-up stress is used for intermittent fault reproduction, and the quantitative relationships between intermittent fault and product damage can be further studied.

It is expected that the proposed methodology can help engineers to reproduce the intermittent fault behaviours to facilitate the detection and diagnosis of intermittent fault and to improve equipment safety.

The mechanism of electrical connector reproduction is analysed and the step-up stress test is used for intermittent fault reproduction.

This paper aims to provide a methodology for designing and conducting solvency stress tests, under the standardised approach as per IFSB-15, including the establishment of macro-financial links, running scenarios with variation of assumptions and stress scenario parameters; apply and illustrate this methodology by providing a stylised numerical example through a tractable Excel-based framework, through which Islamic Commercial Banks (ICBs) can introduce additional regulatory requirements and show that they would remain in compliance with all capital requirements after a moderate to severe shock; and identify the potential remedial actions that can be envisaged by an ICB.

The paper uses the data of the one of the groups to which certain amendments and related assumptions are applied to develop a stylised numerical example for solvency stress-testing purposes. The example uses a Stress Testing Matrix (STeM; a step-by-step approach) to illustrate the stress-testing process. The methodology of the paper uses a two-stage process. The first stage consists of calculating the capital adequacy ratio (CAR) of the ICB using the IFSB formulae, depending on how the profit sharing investment account (PSIA) are treated in the respective jurisdiction. The second stage is the application of the stress scenarios and shocks.

Taking into account the specificities of ICBs such as their use of PSIA, the results highlighted the sensitivity of the CAR of an ICB with respect to the changes in the values of alpha and the proportion of unrestricted PSIA on the funding side. The simulation also indicated that an ICB operating above the minimum CAR could be vulnerable to shocks of various degrees of gravity, thus bringing the CAR below the minimum regulatory requirement and necessitating appropriate remedial actions.

The paper highlights various implications and relationships arising out of stress testing for ICBs, including the vulnerability of an ICB under defined scenarios, demanding appropriate immediate remedial actions on future capital resources and capital needs. The findings of the paper provide a preliminary discussion on developing a comprehensive toolkit for the ICBs similar to what is developed by the International Monetary Fund Financial Sector Assessment Programme.

This paper focuses on the gap with respect to the stress testing of capital adequacy. The main contribution of the paper is twofold. The first is the development of an STeM – a step-by-step approach, which provides a method for simulating solvency (i.e. capital adequacy) stress tests for ICBs; the second is the demonstration of the potentially crucial impact of profit-sharing investment accounts and the way they are managed by ICBs (notably the smoothing of profit payouts) in assessing the capital adequacy of the ICBs.

This paper aims to introduce a model-based stress-testing methodology for Islamic finance products. The importance of stress testing was indeed clearly underlined by the adverse developments in the global finance industry. One of the key takeaways was the need to strengthen the coverage of the capital framework. Cognisant of this fact, Basel III encapsulates provisions to enhance the financial sector’s ability to withstand shocks arising from possible stress events, thereby reducing adverse spillovers into the real economy. Similarly, the Islamic Financial Services Board requires Islamic financial institutions to run stress tests as part of capital planning.

The authors perform thorough backtests on Islamic and conventional portfolios under widely used risk models, which are characterised by an underlying conditional volatility framework and distribution, to identify the most suitable risk model specification. Associated with an appropriate initial shock and estimation window size, the paper also conducts a model-based stress test to examine whether the stress losses estimated by the selected models compare favourably to the historical shocks.

The results suggest that the model-based framework, when combined with an appropriate risk model and distribution, can successfully reproduce past stress periods. The conditional empirical risk model is the most effective one in both long and short portfolio cases – particularly when combined with a long-enough estimation window. The relative performance of normal vs heavy-tailed distributions and symmetric vs asymmetric risk models, on the other hand, is highly dependent on whether the portfolio is long or short. Finally, the authors find that the Islamic portfolio is generally associated with lower historical stress losses as compared to the conventional portfolio.

The model-based framework eliminates some of the key problems associated with traditional scenario-based approaches and is easily adaptable to Islamic finance.

Acceptance sampling plans are designed to decide about acceptance or rejection of a lot of products on the basis of sample drawn from it. Accelerating the life test helps in obtaining information about the lifetimes of high reliability products quickly. The purpose of this paper is to formulate an optimum time censored acceptance sampling plan based on ramp-stress accelerated life test (ALT) for items having log-logistic life distribution. The log-logistic life distribution has been found appropriate for highly reliable components such as power system components and insulating materials.

The inverse power relationship has been used to model stress-life relationship. It is meant for analyzing data for which the accelerated stress is nonthermal in nature, and frequently used as an accelerating stress for products such as capacitors, transformers, and insulators. The method of maximum likelihood is used for estimating design parameters. The optimal test plan is obtained by minimizing variance of test-statistic that decides on acceptability or rejectibility of lot. The optimal test plan finds optimal sample size, stress rates, sample proportion allocated to each stress and lot acceptability constant such that producer’s risk and consumer’s risk is satisfied.

Asymptotic variance plays a pivotal role in determining the sample size required for a sampling plan for deciding the acceptance/rejection of a lot. The sample size is minimized by optimally designing a ramp-stress ALT so that the asymptotic variance is minimized.

The model suggested is of use to quality control and reliability engineers dealing with highly reliable items.

In previous paragraphs of the paper, use has been made for various purposes of the results of investigations carried out for the Panel on a number of disk materials. In this section a detailed description of this work is given.

The supervisory stress test evaluates the capital adequacy and profit-generation capacity of systemic banking institutions under baseline and adverse macroeconomic scenarios. This study aims to assess the financial and informational role of European stress tests and substantiate the impact of their disclosures by examining the EU-wide 2018 stress test vis-à-vis the EU-wide 2021 stress test in terms of how and to what extent the stock prices of the stress-tested banks have been affected.

This study applies standard event study methodologies to evaluate the reactions of market participants during the EU-wide 2018 and 2021 stress test exercises. We examine several “large” events in both the exercises for a selected sample of European banks.

The results of our event study analysis show that the EU-wide 2018 and 2021 stress tests come subsequent to considerable abnormal price movements. The announcement of stress test results triggered tangible investor reactions, indicating the informational value of stress tests in reducing bank opacity. This supervisory “toolkit” is considered extremely important, as it provides meaningful insights to the supervisors of the banking institutions and the market stakeholders by improving the transparency of the financial sector, allowing them to segregate banks more effectively.

This study constitutes one of the earliest attempts to shed light on the financial and information role of the European supervisory stress tests by comparing the EU-wide 2018 and the EU-wide 2021 stress test exercises. Moreover, it provides concrete empirical evidence and qualitative analysis to explore certain aspects of the European and US stress tests.

In this paper, the author proposed an optimization design for a step-stress accelerated life test (SSALT) with two stress variables for the generalized exponential (GE) distribution under progressive type-I censoring.

In this paper, two stress variables were considered. Progressive censoring and accelerated life testing were used to reduce the time and cost of testing. It was assumed that the lifetimes of the test units followed a GE distribution. The effects of changing stress were considered as a cumulative exposure model. A log-linear relationship between the scale parameter of the GE distribution and the stress was proposed. The maximum likelihood estimators and approximate and bootstrap confidence intervals (CIs) for the model parameters were obtained. An optimum test plan was developed using minimization of the asymptotic variance (AV) of the percentile life under the usual operating condition.

According to the simulation results, the bootstrap CIs of the model parameters gave more accurate results than approximate CIs through the length of CIs. The sensitivity analysis was performed to illustrate the effect of initial estimates on optimal values that has been studied. Simulation results also indicated that the optimal times were not too sensitive to the initial values of parameters; thus, the proposed design was robust.

In most studies, only one accelerating stress variable is used. Sometimes accelerating one stress variable does not yield enough failure data. Thus, two stress variables may be needed for additional acceleration. In this paper, two stress variables are considered. The inclusion of two stress variables in a test design will lead to a better understanding of the effect of two simultaneously operating stress variables. Also, the author assumes that the failure time of the test units follows a GE distribution. It is observed that the GE distribution can be used quite effectively to analyze lifetime data in place of gamma, Weibull and log-normal distributions. Also, most studies in this field have focused on the derivation of optimum test plans. In this paper, the author examined the estimation of model parameters and the optimization of the test design. In this paper, the asymptotic and bootstrap CIs for the model parameters are calculated. In addition, a sensitivity analysis is performed to examine the effect of the changes in the pre-estimated parameters on the optimal hold times. For determining the optimal test plan, due to nonlinearity and complexity of the objective function, the particle swarm optimization (PSO) algorithm is developed to calculate the optimal hold times. In this method, the research speed is very fast and optimization ability is more.