What is stress testing for banks?
|
|
|
|
Swatantra Kumar answers: Recently, several European banks were in the news for failing stress tests. A stress test for banks is a simulated test of their strengths, done to find out if these banks can withstand sudden and unfavourable economic and market conditions, when the need arises.These tests also reveal weak spots in some banks when the going is still good and a course correction is forced on those banks to address the weak spots. Stress tests gained in importance after the 2008 global financial crisis importance after the 2008 global financial crisis that wiped out several banks around the world, or forced some to merge with stronger banks. Often, such stress tests are done by the banking sector regulators at a regular intervals.
Send in your suggestions, queries to investor.swatantra@gmail.com;
for a free financial planning booklet, please SMS `EDU' to 5676756
Mutual Fund investments are subject to market risks, read all scheme related documents carefully
No comments:
Post a Comment