Impact Tolerance

Impact tolerance is defined as a firm’s tolerance for disruption to a particular business service. Setting impact tolerances for critical business services may help ensure that boards and senior management consider what the firm would do when a disruptive event occurs, rather than only trying to minimise the probability of disruption.

The regulators require that firms should set their impact tolerances at the first point at which a disruption to a critical business service would cause intolerable levels of harm to consumers or market integrity. Firms are best placed to determine the point at which to set their impact tolerance, taking on board the needs of their customers.