February 2020

Primer on the Forward-Looking Analysis of Risk Events (FLARE) Model: A Top-Down Stress Test Model

Sergio Correia, Kevin F. Kiernan, Matthew P. Seay and Cindy M. Vojtech


This technical note describes the Forward-Looking Analysis of Risk Events (FLARE) model, which is a top-down model that helps assess how well the banking system is positioned to weather exogenous macroeconomic shocks. FLARE estimates banking system capital under varying macroeconomic scenarios, time horizons, and other systemic shocks.

Note: On February 14, 2020, this paper was updated to include additional acknowledgements.

Accessible version (.zip)

DOI: https://doi.org/10.17016/FEDS.2020.015

PDF: Full Paper

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Last Update: February 14, 2020