Fed stress tests on the banks will require lenders to show they can withstand a recession in...

|By:, SA News Editor

Fed 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.