What Do You Think of The Baseline And Adverse Scenarios of the Stress Test?

Government Offers Details of Bank Rescue Plan

The stress tests will use two economic situations to gauge banks’
health and are expected to be completed by the end of April. The
results will help regulators decide whether banks may need additional
assistance so they can carry out the critical mission of boosting
lending to customers, a key ingredient to the economic turnaround.

The “baseline” situation envisions the nation’s gross domestic product,
which is the value of all goods and services produced within the United
States and the broadest barometer of the country’s economic health,
falling 2 percent this year, unemployment rising to 8.4 percent and
home prices dropping 14 percent.

The “adverse” situations assumes
G.D.P. will drop 3.3 percent, unemployment rising to 8.9 percent and
home prices falling 22 percent this year.

This entry was posted in Uncategorized. Bookmark the permalink.