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Alexkid

Fed announces third round of bank stress tests
MARTIN CRUTSINGER
(The Associated Press)

04:50:16AM (ET) Wednesday,November 23,2011.

WASHINGTON (AP) — The Federal Reserve announced on Tuesday that it will conduct a third round of stress tests to determine if major U.S. banks can withstand a downturn in the economy.

The latest round of tests comes at a time when many are concerned about U.S. banks' exposure to the European debt crisis, which could throw that region into a recession and rattle global financial markets.

Vice Chairman Janet Yellen last week said the Fed would pursue the stress tests in coming weeks.

The Fed performed the first stress tests in the spring of 2009. The country's 19 largest banks participated. The initial stress test reassured investors that America's biggest banks had the resources to get through the recession and the fallout from the 2008 financial crisis.

For the latest test, the field has been expanded to 31 banks. The financial regulatory overhaul passed last year requires banks with at least $50 billion in assets to take part.

The Fed said that the banks would be required to test their ability to withstand a recession beginning at the end of this year that would drive unemployment up to more than 13 percent by early 2013. The jobless rate now stands at about 9 percent. The central bank said the parameters of its test would reflect a sizable drop in economic activity not only in the United States but in the global economy.

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I guess there is a purpose for these tests. Don't think the banks are doing well. There were several banks last week that failed.

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Yeah...Do That.