The Federal Reserve Board ("FRB") provided additional information on models developed by the FRB's latest round of supervisory stress tests. According to the FRB, disclosing such information about the modeling process can improve the "credibility of the test" and transparency with respect to the supervisory models.
The information included:
- ranges of bank loss rates - projected using FRB models - for loans that are categorized by risk characteristics;
- portfolios of hypothetical loans with loss rates; and
- improved descriptions of FRB models.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
