September 13, 2023 (NO COMMENTS)

This year’s CCAR faced criticism for underweighting the risk of higher-for-longer inflation

Imagine you walked into the school hall having prepared for a literature exam, but the examiner handed you a history test instead. While not quite so nightmare-inducing, banks feel they have faced a similar twist of fate in this year’s Federal Reserve stress test. The severely adverse scenario in the 2023 comprehensive capital analysis and review (CCAR) was based around a recession with a sharp fall in inflation. But in reality, banks are also facing up to concerns about persistent high