Almost all major US banks comfortably passed the US Federal Reserves stress tests last month. While thats certainly good news, the purpose of these tests is to determine whether banks have effective capital planning processes and sufficient capital to absorb losses during stressful conditions, not whether they can earn a risk-adjusted return even close to what they were accustomed to in previous decades. In an interview with Ivan Leung, Financial Planner Kam Yuen is going look in to what exactly is a stress test for Banks and how the tests results on US banks affected banks in Australia.
Almost all major US banks comfortably passed the US Federal Reserves stress tests last month. While thats certainly good news, the purpose of these tests is to determine whether banks have effective capital planning processes and sufficient capital to absorb losses during stressful conditions, not whether they can earn a risk-adjusted return even close to what they were accustomed to in previous decades. In an interview with Ivan Leung, Financial Planner Kam Yuen is going look in to what exactly is a stress test for Banks and how the tests results on US banks affected banks in Australia.
