Fed to stress test six US banks on Europe fears

The Federal Reserve plans to stress test six major US banks against market shocks, as part of an annual review of bank health.

Next year it will publish year the results of the tests Bank of America, Citigroup, Goldman Sachs, JPMorgan Chase, Morgan Stanley and Wells Fargo The tests, which come partly in response to fears over the eurozone crisis, will be based on price and rate movements that occurred in the second half of 2008, and also on "potential sharp market price movements in European sovereign and financial sectors", the Fed said. In the hypothetical stress scenario, unemployment would spike as high as 13% while US GDP would fall by as much as 8%, according to Reuters. “The aim is to ensure institu...