Monday, March 12, 2012

Fed Unveils Doomsday Scenario for Banks

The question you should be asking is why exactly does the Fed feel the need to put banks through  doomsday scenario stress tests of a 50% drop in stocks, 13% unemployment rate, and a 21% decline in housing prices?  What exactly are they expecting?

The Federal Reserve released its "worst-case scenario" bank stress test criteria Monday and said it will release full results Thursday at 4:30 p.m. ET.
The Fed will look at how the nation's 19 largest banks would survive a world with a 13 percent jobless rate, a 50-percent drop in stocks, a 21-percent decline in housing prices and a significant contraction of other major world economies.

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