stress test

[oakranger]

What or how dose this "stress test" work on the banks

[WilldCrd]

The way I understand it they run a computer simulation on the bank in a "what if"
 type of scenario. Basically they input the numbers for cash on hand, cash comming in monthly, loans, mortgages ect THEN they monkey with the interest rates, unemployment rates and see what happens when ppl start defaulting on loans and such. They look to see how long the bank will survive and if it's investments and other sources of revenue will keep it solvent until the economy starts to recover.

Basically it's a big simulation kinda like sim city or one of those tycoon games (railroad, amusement park ect) They test it to see if it can survive in a worse case scenario. 10 didn't btw. they esimated the 10 in question would need close to 80 BILLION to stay afloat. Despite what the media makes it out to be that is ALOT of cash. Not as much as what we have already blown but it's still alot.
Hope this helps

[Masherbrum]

It's supposed to make us feel like the Govt. is actually going to do something about the corruption of the banks.   

"Ignore the fool behind the curtain."

[SIK1]

It's supposed to make us feel like the Govt. is actually going to do something about the corruption of the banks.   

"Ignore the fool behind the curtain."

So are the bankers going to do something about the corruption in the government next?

What a crock!

[Masherbrum]

So are the bankers going to do something about the corruption in the government next?

What a crock!

Dunno, I was being sarcastic as hell.   

[oakranger]

Now children.  We don't need to fight.  Just wondering what the test is about.  Personally, if they are a "what if" i wont relied on it to be helpful. Some banker make bad decisions to put.
 Heck, a small bank near Wichita, Kansas gave a guy a $6 million loaned for a theme Park.  The park was done and bankrupt a few week after it open.  Now that banker is in dire need of money to pay it off.