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kind of shocks for regulatory stress tests
hi,there has been a lot of talk about the results of regulatory stress tests recently. does anyone know what kind of shocks are used. like to predict defaults and market losses what can be the factors stressed. gdp growth, interest rate, inflation, unemployment, jobless claims, market movements, etc. Are the scenarios defined by the regulators or do the banks have discretion specific to their own circumstances.thanks.
kind of shocks for regulatory stress tests
For the United States, go to http://www.federalreserve.gov/bankinfor ... ing.htmand follow some of the links under Related Documents which describe the shocks.