Banking’s Final Exam: Are Current Stress Tests and Reforms Enough?

Stress tests see whether a bank has enough capital to survive tough scenarios, like high unemployment and plunges in home prices. But are these tests, along with other reforms made under the Dodd-Frank Act of 2010 and the Basel III international banking regime, enough to make banks safe and sound? New research from Morris Goldstein’s book, Banking’s Final Exam, says no, and offers solutions.