Stress Testing of Banks in the USA
Journal Title: Oblik i finansi - Year 2022, Vol 1, Issue 4
Abstract
The banking system of any state is a component of its economic system. Therefore the stability of the entire national economy depends on its smooth and effective functioning. Given the globalization of economic relations today, the stability of the banking systems of other countries with open market economies, which have close financial ties, depends on the stability of the US banking sector. The purpose of the article is to reveal the features of stress testing of banks in the USA and to assess the dynamics of the stability of the banking system of this country over the past 20 years. Stress testing of banks in the USA is carried out to identify and measure the banking sector's vulnerability to shock macroeconomic events in the national and global economy. This study is based on the analysis of the dynamics of four indicators: the capital sensitivity coefficient, the sensitivity index to the forced quick sale of assets, the liquidity coefficient for stress scenarios, and the sensitivity index to the loss of liquidity and solvency. It was revealed that the US banking system was most unstable during the 2008-2009 crisis when banks suffered significant losses due to risky credit policies. Post-crisis regulation of capital and liquidity, thanks to the balanced policy of the Federal Reserve System, led to many subsequent years of stability. Banks also had to apply anti-crisis regulatory measures in the “covid” 2020 year, and these measures brought positive results. The shock events did not affect the stability of the US banking system but were reflected in the amount of cash. The loosening of anti-crisis measures in 2021 caused some growth in the indicators calculated during stress testing. However, it did not lead to the destabilization of the banking system.
Authors and Affiliations
Oksana Posadnieva
Keywords
Related Articles
- EP ID EP715479
- DOI 10.33146/2307-9878-2022-4(98)-37-42
- Views 23
- Downloads 0
Organizational and Legal Form of the State System of Agricultural Extension Services
The idea of creating the State System of Agricultural Extension Services was legally declared as early as 2011, but still remains unrealized. The purpose of the article is to determine the organizational and legal framew...
Accounting for Capital Turnover
Economic globalization, digitalization of management processes, introduction of new forms of business organization, implementation of the concept of sustainable development are factors that affect the process of capital...
Some Aspects of Administration of Taxes
Today in Ukraine, the dynamics of tax revenues to the budget (completeness and timeliness of tax payments) and the ability of the state to pay for the creation of public goods in a timely and proper manner depend on the...
Китайська модель обліку землекористування: уроки для України
Одним із найбільш ефективних методів розв’язання економічних проблем є вивчення зарубіжного досвіду. Метою статті є розкриття засад бухгалтерського обліку землекористування в Китаї та обґрунтування передумов впровадження...
Ontology of Variability of Accounting for Financial Rent
Research on financial rent has been at the forefront of economics since the middle of the twentieth century in market economies due to the growing role of financial capital and the formation of the stock market. Today so...