The Federal Reserve recently completed a series of “stress tests” to determine which of banks bailed out by the government three years ago are sound enough to weather another financial storm. As reported in the NY Times, four major banks failed the tests. They are Citigroup, Ally Bank (but A for Advertising), Sun Trust and Met Life. A number of big banks passed the tests with flying colors including Bank of America, JPMorgan, and Wells Fargo.
The tests are quite comprehensive and rather complicated but we can summarize by saying that the Fed based its performance predictions on 13% unemployment, sharply falling stick prices, and still further sharp declines int he housing market.
(Photo CBS News March 13, 2012)
