Fed urged to introduce annual high-rate stress tests
Results of debut scenario were reassuring, but regulators cannot lower their guard
Experts broadly agree the US Federal Reserve’s inaugural stress test of interest rate risk was a success. But to get the full benefits, it shouldn’t just be a one-off exploratory scenario.
“It is hard to guess how economic conditions will change in the next six months, and how they would influence the choice of scenarios,” says Til Schuermann, a partner at Oliver Wyman who previously worked at the New York Fed developing the original post-2008 stress-testing regime. “But I do think it is
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