Stress Tests of U.S. banks will take into account the probability of a recession

Federal Reserve System (FRS) the USA has asked the 19 largest U.S. banks include stress testing of capital adequacy scenario of a new wave of recession in the light of rising unemployment to 11%, Bloomberg reported sources in financial circles. In particular, the worst-case scenario should involve a fall in GDP to 1.5% by the end of 2011 and rebound by the end of 2013. With this scenario, unemployment should be considered at around 11% in the first quarter of 2012 and at the level of 9,5% at the end of 2013. According to sources, these figures should be included in a broader assessment of levels of credit, income and capital, the consideration of at least three options for the development of the situation. In addition, financial authorities in the U.S. banks were asked to assess the impact on their profits of new regulation of banking activities in the country, in particular, the law of the Dodd-Frank and the tightening of international capital requirements. Dodd-Frank Act, named after the head of the Committee on Financial Services House of Representatives Barney Frank and Sen. Christopher Dodd, who heads the banking committee of the upper house of Congress, was signed by U.S. President Barack Obama in July 2010. Its main purpose is to protect American taxpayers from excessive risks in the financial system, as well as preventing the recurrence of large-scale financial crisis. Legislation, in particular, requires market participants to transfer operations with derivatives on an exchange, but also limits the amount of fines on overdue credit cards. To finally earned a law is required to adopt 243 regulations act and conduct more than 150 additional research on various topics of general director of investment bank JPMorgan Braunstayn Douglas (Douglas Braunstein) a few days earlier said that the financial institution has conducted a stress test in which the alleged conditions were even more severe: the bank came from a reduction in the economy by more than 4% by the end of the third quarter of this year and unemployment at around 11.7%. According to the results of stress tests of 19 leading U.S. banks, was conducted in May 2009, it was concluded that the major U.S. banks need more than $ 74 billion of additional capital. However, it was recognized that some of the banks is quite stable. On materials: BANKIR.ru