On February 10, the Federal Reserve Board released the hypothetical scenarios for CCAR 2022: The Fed - 2022 Stress Test Scenarios (federalreserve.gov) This year, 34 large banks will be tested... read more →
Many US banks have posted higher-than-expected noninterest expense growth in their 4Q21 earnings due to inflationary pressures from wages. For example, Goldman Sachs Group Inc. shelled out an additional $4.4... read more →
As we get ready to welcome 2022, are there any key risk factors which emerged this year and are expected to influence the economy next year? Inflation and its implication... read more →
In a recent LinkedIn post we highlighted the risk of repricing for real estate assets due to rising interest rates and inflation. The latter will also negatively impact industries that... read more →
On June 24 the Federal Reserve released the results of its annual bank stress test: https://www.federalreserve.gov/newsevents/pressreleases/bcreg20210624a.htm The results have showed that all 23 banks that participated in this year’s exercise... read more →
One of the criticisms of regulatory stress testing is the assumption of constant balance sheets for banks during the horizon of a stress scenario. In this article we examine some... read more →
On February 12, the Federal Reserve Board released the hypothetical scenarios for CCAR 2021: https://www.federalreserve.gov/newsevents/pressreleases/bcreg20210212a.htm Although the scenarios are intended for testing the resiliency of large banks, the top 19... read more →
The Federal Reserve Board just released the scenarios for the second round of stress testing for the large banks. https://www.federalreserve.gov/newsevents/pressreleases/bcreg20200917a.htm The second round scenarios include two hypothetical scenarios with a... read more →
In a recent post we introduced our RMA journal article on the “Forbearance Cliff”, a cliff that banks and borrowers have been faced with as the corresponding accommodation programs expire.... read more →
Forbearance is a “wait-and-see” strategy for banks to reduce uncertainties associated with the recovery and flatten the loss curve. However, it cannot last forever. As the so called accommodation programs... read more →