Follow Newser on Twitter   Friend Newser on Facebook
Snappy newsletters. Simple Facebook sharing. Spirited comments. Sweet features are waiting… GET THEM NOW!

Hot on Facebook
Guy Buys $123 Safe on eBay, Finds $26,000 Inside Seller tries to get half the cash back, fails »

Fed Describes 'Stress Tests'

By Nick McMaster,  Newser Staff

Posted Apr 24, 2009 4:06 PM CDT
Email

(Newser) – At the behest of the Federal Reserve, the 19 biggest US banks are projecting their losses on 12 categories of financial product such as loans and mortgage securities, the New York Times reports. The Fed, which asked the institutions to project a hypothetical scenario of a “stressed economic environment,” made outlines of its criteria public today.

The report withholds some details on how the test values losses in various financial products or protections against them. It focuses on the amount of capital held in common stock. "Losses associated with the deepening recession and financial market turmoil have substantially reduced the capital of some banks," the Fed said in a statement. Troubled major banks may be required to raise new capital to meet pending common-stock requirements.

Two security officers walk outside the gate to the Federal Reserve Bank of Minneapolis as an employee, background, takes a break with a book in the interior courtyard Friday, April 24, 2009 in Minneapolis.
Two security officers walk outside the gate to the Federal Reserve Bank of Minneapolis as an employee, background, takes a break with a book in the interior courtyard Friday, April 24, 2009 in Minneapolis.   (AP Photo/Jim Mone)
Federal Reserve Chairman Ben Bernanke, left, and Treasury Secretary Timothy Geithner take part in a meeting of the G7 at the Treasury Department in Washington, Friday, April 24, 2009.
Federal Reserve Chairman Ben Bernanke, left, and Treasury Secretary Timothy Geithner take part in a meeting of the G7 at the Treasury Department in Washington, Friday, April 24, 2009.   (AP Photo/Evan Vucci)
A customer uses a CitiBank ATM in Palo Alto, Calif., Tuesday, Feb. 24, 2009.
A customer uses a CitiBank ATM in Palo Alto, Calif., Tuesday, Feb. 24, 2009.   (AP Photo/Paul Sakuma)
« Prev« Prev | Next »Next » Slideshow
To report an error on this story, notify our editors.
A snapshot of the day's best news stories.
 
COMMENTS
Be the first to comment on this story.

Read more details on the stress tests
Time

 
Federal Reserve • bank • Treasury Department • bank failure • financial crisis • stress tests

More Newser Stories

Bernanke: Risks Remain Despite Stress Tests

Bank Wrangling Softened Stress Test Results

Stress-Tested Banks Need Just $100B

Stress Tests Expected to Show Confidence in Banks

Citi May Need Extra $10B to Pass Stress Test
NEWS FROM OUR PARTNERS
Other Sites We Like:   24/7 Wall St.   |   Betty Confidential   |   BuzzFeed   |   Cracked   |   Fark   |   Timelines   |   The Frisky   |   Geek Sugar   |   NewsOne