The Federal Reserve Board (Fed) stated that various plans will be made based on the assumptions of bank stress tests.
The Fed stated that as a result of the decision taken on Thursday, it will provide debt support to the public and businesses even in a passive environment. According to this decision by the Fed, hypothetical plans for the annual stress test for banks were published. Due to increasing stress in debt markets, 23 banks will be tested this year against global inactivity for commercial and residential purposes.
FED Will Make Plans Based on Stress Test Data
This test by the Fed will present hypothetical passive data for two years from now. The data will estimate capital determinations that provide support for net income, losses and losses. In the light of these data, the Fed aims to test the stress resilience of banks.
In addition to the hypothetical plans, banks with large business transactions will first be tested for the global market shock that highlights business transactions. Global market shock data is hypothetical data with the market problem and its growing uncertainty.
The market shock will be applied for the first time in this year’s stress tests. The commercial books of the major banks will contain special consequences for the firm and additional exploratory market shock. At the same time, this year’s stress test will be used to broaden understanding of the resilience of large banks. The board stated that more than one plan will be made to capture more data in other stress tests planned in the future. It will use data from the market shock for the potential assessment of these plans.
