The Fed conducts the tests on banks every year, but this is the first time since 2009 that it will release its results to the public.The tests are designed to make sure banks have enough cash and cash-like securities to withstand catastrophic losses in a financial crisis. 19 largest banks of US have been subjected to these stress tests
Three criteria used for US banks stress tests
1) 13 percent jobless rate
2) 50-percent drop in stocks
3) 21-percent decline in housing prices
The Fed can stop banks from paying stock dividends or buying back their own stock if they fail the test. The Fed wants banks to be strong enough to keep lending money to Americans and businesses.
Three criteria used for US banks stress tests
1) 13 percent jobless rate
2) 50-percent drop in stocks
3) 21-percent decline in housing prices
The Fed can stop banks from paying stock dividends or buying back their own stock if they fail the test. The Fed wants banks to be strong enough to keep lending money to Americans and businesses.
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