Severely adverse scenario will now include ‘more severe downturn’ for US
Severely adverse scenario will now include ‘more severe downturn’ for US
The toughest scenario in the US Federal Reserve Board's annual stress tests will feature a "more severe downturn" in the US economy than in the past, it announced on January 28.
Bank holding companies (BHCs) will be tested against three scenarios: baseline, adverse and severely adverse. The third scenario, characterised by a "severe global recession", will see unemployment soar to "at least" 10%, as well as "negative yields" for short-term US Treasuries.
"In adjusting the scenarios for our
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