Just because a bank has a big name doesn't mean it's in a good position to cope with market mayhem.
 
Tons of big name banks were totally caught off guard back when the 2008 financial crisis hit - and the government had to step in and bail them out
 
So to ensure that does not happen again -- the Federal Reserve now requires them to undergo a series of tests - called stress tests -- to make sure they're prepared for the worst.
 
These stress tests - also known as the Comprehensive Capital Analysis and Review -- basically put the banks through a bunch of what-if scenarios.
 
For example:
  • What if the unemployment rate rises to a certain number?
  • What if the equity markets crash by more than X?
  • What is GDP falls by more than X?
  • What if interest rates go up by at least Y%?
  • What if oil rises by some big number? 
 
And the big question is: does the bank have enough money in reserve if any of the above scenarios happen?
 
Watch the video above to find out the answer to that question and more!
 
 

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