How to prevent a financial crisis
The Federal Reserve is releasing the first part of its annual stress tests for big banks today. All of the major banks are expected to pass this year, which is good news if you want to see the U.S. financial system survive a future crisis. The test applies to more than 30 of the biggest banks in the country, and aims to ensure that banks have enough cash reserves to withstand a severe global recession like the 2008 financial crisis.
Also today, Jay Powell, a governor of the Federal Reserve, is expected to testify before the Senate that the Volcker Rule, which prevents banks from making risky bets with their own money, is too constricting.
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