'Stress Test' Home Price Scenarios

The Fed on Friday released additional details of the "stress test" that regulators are using to determine whether or not the nation's largest banks have sufficient capital to handle the coming economic hardships. In constructing the test, regulators made forward-looking assumptions about key macroeconomic trends--unemployment, GDP, home prices--that would influence bank performance in 2009 and 2010. These assumptions were divided into a baseline and a more adverse scenario. Banks found to be lacking sufficient capital will be required to raise more cash through private investors or from Uncle Sam. Although regulators aren't expected to make the results public until May 4, the Fed said Friday that "most U.S. banking organizations currently have capital levels well in excess of the amounts required to be well capitalized."

Here's a look at the projections for home prices that regulators used in the "stress test."

Reader Comments Read all comments (1)

Add Your Thoughts

Comment Name State Select One AL AK AZ AR CA CO CT DE DC FL GA HI ID IL IN IA KS KY LA ME MD MA MI MN MS MO MT NE NV NH NJ NM NY NC ND OH OK OR PA RI SC SD TN TX UT VT VA WA WV WI WY International Email

Please enter the two words below into the text field underneath the image.

Incorrect please try again

Enter the words above: Enter the numbers you hear:

Your comment will be posted immediately, unless it is spam or contains profanity. For more information, please see our Comments FAQ.