Asset Based Loan

Federal Reserve announces banks pass stress test

According to the Federal Reserve’s March 13th, 2012 press release,  the majority of the largest U.S. banks continue to meet supervisory expectations for capital adequacy.      This is despite what the Fed called “large projected losses in an extremely adverse hypothetical economic scenario.

The Federal Reserve’s (CCAR), Comprehensive Capital Analysis and Review, makes evaluations of the capital planning processes and capital adequacy of the largest banks.   The “Stress Test” is a test that assumes the following scenarios.

A 13 % unemployment rate.

A 50% drop in the stock market.

A 21% decline in housing prices

Losses at 19 Banks totaling $534 Billion

Under this test, 15 of the 19 largest banks were still able to maintain capital rations above all 4 of the regulatory minimum levels.

Federal Reserve Stress Test

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