A Continuing Stress Headache

In this report, we analyze the mortgage-related requirements of the new FRB stress tests. As with the 2012 CCAR exercise and as required by Dodd-Frank, the 2013 tests impose a baseline, adverse and severely-adverse scenarios.  Large BHCs must prove themselves capital resilient under even the harshest scenario to pay dividends or make other capital distributions over the next nine quarters, making passing these tests a vital strategic driver at the largest BHCs on which the U.S. mortgage market relies.

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