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Maybe somebody here can explain something I just doin't seem to be able to understand. Why is it so hard for banks to do a stress test? They have all the data.
by strangattractor 4y ago
Maybe somebody here can explain something I just doin't seem to be able to understand. Why is it so hard for banks to do a stress test?
They have all the data. If I was CEO of a bank I'd want to be able to get up in the morning and have some idea how much risk and what types of risk my bank was assuming. Especially in a dynamic environment of Fed interest rate changes. I would think they would be doing it all the time. Isn't that what computers do? Simulate scenarios like - What does our bank look like if the Fed raises rates to %2 etc. It makes me feel like they truly just don't want to know so they can do whatever they want.
- bagels 4y agoIt isn't hard. They want a try at getting a little more profit in exchange for risk. Stress tests prevent them from taking those risks, therefore they lobby against them and don't do them unless compelled.
- s1artibartfast 4y agoThey all know exactly what is up. It wasn't a surprise. They just didn't have many good options to choose from
- JumpCrisscross 4y ago> Why is it so hard for banks to do a stress test? They're super involved, requiring a full-time department to prepare for and run. That's a multi-million dollar recurring expense a bank with tens of millions of dollars of profit may not be able to afford.