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Fed stress tests on the banks will require lenders to show they can withstand a recession in...
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Thursday, November 15, 2012, 4:20 PM ETFed stress tests on the banks will require lenders to show they can withstand a recession in which unemployment rises more than 400 bps, GDP declines 5%, equity prices fall more than 50% (along with the VIX jumping 70%), and residential and commercial property values fall more than 20%. It sounds harsh, but it's still not as bad as what happened from 2007-09. Capital plans are due on Jan. 7.
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But you don't understand how undercapitalized the banks were back then...,banks are loaded with TCE now and it will be that way until we forget the pain of 2008 ( which means a long long long time)
The US bank stress test has been indeed very severe, basically assuming a repeat of the Great Depression.