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- Title
Implementing Dodd-Frank Act Stress Testing.
- Authors
Ryznar, Margaret; Sensenbrenner, Frank; Jacobs Jr., Michael
- Abstract
In recent years, the question of how to prevent another crippling recession has become a prominent one. The answer provided by the Dodd-Frank Act is stress testing, which examines through economic models how banks would react to a bad turn of economic events, such as negative interest rates. The first of its kind in the legal literature, this Article offers a model for stress testing that banks should use in complying with Dodd-Frank. Specifically, this Article finds that the Bayesian model that takes into account past outcomes, namely the Federal Reserve's previous stress test scenarios, is the most accurate model in stress testing.
- Subjects
DODD-Frank Wall Street Reform &; Consumer Protection Act; ECONOMIC models; BAYESIAN analysis; FINANCIAL stress; BOARD of Governors of the Federal Reserve System (U.S.)
- Publication
DePaul Business & Commercial Law Journal, 2016, Vol 14, Issue 3, p323
- ISSN
1542-2763
- Publication type
Article