Archive for May 5th, 2009

SCAP, The Government's Naive Stress Testing Exercise

Andy Spero | May 5, 2009 | 0 Comment(s) |

Or, Is It the Naive Government’s Stress Testing Exercise?

More Lack of Planning and Insight from Our Regulators and Government Officials

About one month ago–on April 7, to be precise–we asked, Where Will the Bank Stress Testing Exercise Lead?

In that post, we wrote that the tests could be designed one of three ways: (1) with a positive bias to ensure that all or almost all of the banks could pass the tests, (2) with no bias to get… Read the rest

Swine Flu and Bank Stress Tests

Andy Spero | May 5, 2009 | 0 Comment(s) |

Last week we wrote two related posts: A New Influenza Stress Test and Influenza Pandemic Stress Test, Part II. Both posts discuss the need for banks to perform stress tests/scenario analyses that incorporate the possible negative economic effects of a flu pandemic in additional to consideration of possible additional structural weaknesses (and shrinkage) in the economy.

In the second post, we mentioned a government study from a few years ago that estimated a five percent contraction in GDP if the USA faced a severe… Read the rest