“They found the Fed didn’t always have enough staff on hand, relied too heavily on certain key personnel, and lacked clear procedures and policies about certain aspects of the validation process.”
Not to mention they all use the same patented software systems and are all virtually integrated… Yeah, they are big – but with the right administration and Congress they’ll go down…
Is the Federal Reserve failing at its own stress tests?According to its own watchdog, the answer is yes.
Over the weekend, the Wall Street Journal published an article that cited a recent report from the Fed’s Inspector General, which wasn’t too kind to the Fed’s handling of the stress tests required by the Dodd-Frank Wall Street Reform Act,
According to the WSJ report, the Fed IG found that the Fed was not properly administering the stress tests, which are performed on the nation’s largest banks to test their financial footing in the case of another massive recession.
According to the WSJ, the Fed IG identified a number of issues with the Fed’s internal procedures, which the Fed has already begun “revamping” as the result of the IG’s report.
From the WSJ:
The changes affect implementation and administration of procedures—such as how the Fed staffs the tests—not core policy questions…
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