The Federal Reserve is releasing the results of its annual stress tests of big banks in two parts, on Thursday, June 21, and Thursday, June 28. Here is what you need to know to understand the news.
What is a stress test?A stress test is an examination of what would happen to a bank under difficult conditions. The Fed conjures up hypothetical scenarios, such as massive unemployment and other doomsday conditions. Then it looks at the bank’s real-life balance sheet and calculates how much money it could lose....
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