Fed to release banks stress test results Thursday

[March 13, 2012]  NEW YORK (AP) -- The Federal Reserve says it will release results Thursday of its so-called stress tests of the nation's 19 largest banks.

The Fed conducts the tests on banks every year, but this is the first time since 2009 that it will release its results to the public.

The tests are designed to make sure banks have enough cash and cash-like securities to withstand catastrophic losses in a financial crisis. The Fed wants banks to be strong enough to keep lending money to Americans and businesses.

Among the scenarios the tests imagine are 13 percent unemployment, much higher than today's 8.3 percent, and a 50 percent drop in stock prices.

The Fed can stop banks from paying stock dividends or buying back their own stock if they fail the test.

[Associated Press]

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