CLOs and lev loans at the center of 2020 Fed stress tests
The Federal Reserve announced plans to stress test bank holdings of leveraged loans and CLOs during a hypothetical recession in its annual evaluation of the health of the 34 largest US banks.
The stress test is a simulated scenario that measures how large banks with significant trading operations would fare during a period of market turbulence, with the unemployment rate raised by 6.5%-10% and with elevated stress in corporate debt markets and real estate.According to a statement from ...
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