NYT: Banks Are Falling Short in Planning for the Worst, Fed Says

According to the New York Times:

Most large banks appear to have been sailing through the annual “health checkups” they have had to undergo since the financial crisis.

But on Monday, the Federal Reserve described some significant shortcomings in the banks’ responses to the so-called stress tests.

Despite the severity of the recent housing crisis, the Fed said some banks were not taking into account the possibility of falling house prices when valuing certain mortgage-related assets for the tests.

In other cases, banks assumed they would be strong enough to take business away from competitors in times of stress.

The full article is here.

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