On Friday, the Fed released frequently-asked questions (FAQs) on the assumptions underlying the big-BHC stress test that determines which firms with assets over $50 billion can provide capital distributions. We here assess these model assumptions because they are key strategic drivers of BHC decisions about which mortgages to originate, hold and securitize as the new U.S. capital framework comes into effect.

The full report is available to subscription clients.  To find out how you can sign up for the service, click here

 

.