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re: Why are banks hoarding so much $$$?
Posted on 6/20/14 at 12:08 am to LSURussian
Posted on 6/20/14 at 12:08 am to LSURussian
Russian, is it true that the Fed Reserve doesn't "stress test" for a rise in interest rates?
I forgot where I heard that, but isn't that a pretty important thing to test for?
I forgot where I heard that, but isn't that a pretty important thing to test for?
Posted on 6/20/14 at 11:10 am to stuntman
quote:I don't know for sure but I'd be really surprised if that were the case.
Russian, is it true that the Fed Reserve doesn't "stress test" for a rise in interest rates?
I know even back in the mid-90's before I got out of banking my bank had to do "shock" modeling tests of its balance sheet and income statement based on dramatic changes (rise and/or fall) in interest rates.
That was a requirement of the OCC's bank examiners and we had to show them our test results.
So to think the Fed's stress tests don't include interest rate change scenarios isn't logical, IMO.
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