U.S. Federal Reserve 2012 bank stress test simulates conditions reminiscent of a 1st stage economic collapse

Eric Platt
Business Insider
Wed, 23 Nov 2011 15:06 CST

The dark clouds in the Federal Reserve’s 2012 annual stress test are keeping bankers up at night, as banks are being asked to imagine their balance sheet situation under some horrible economic scenarios.

Under the Fed’s bleakest black sky scenario, financial institutions will have to weather 13.1% unemployment, the Dow at 5,600, and Europe in severe recession.

The test, known as the Comprehensive Capital Analysis and Review, includes 12 other metrics for the U.S. market including GDP and inflation, with another 11 points for global economies.

[…]

Remember, banks have less than two months to stress test their portfolios against these, and 21 other metrics. For a full list of scenario inputs visit the Federal Reserve’s site.

via US: Federal Reserve 2012 bank stress test simulates conditions reminiscent of a 1st stage economic collapse — Puppet Masters — Sott.net.

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