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Dodd-Frank Act Stress Test 2015: Supervisory Stress Test Methodology and Results

Dodd-Frank Act Stress Test 2015: Supervisory Stress Test Methodology and Results published on

Authored by Board of Governors of the Federal Reserve System

The Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act) requires the Fed-eral Reserve to conduct an annual stress test of BHCs with $50 billion or more in total consolidated assets and all nonbank financial companies designated by the Financial Stability Oversight Council (FSOC) for Federal Reserve supervision. The Board adopted rules implementing this requirement in October 2012.
For this year’s stress test cycle (DFAST 2015), the Federal Reserve conducted supervisory stress tests of 31 BHCs.
This report provides background on Dodd-Frank Act stress testing; details of the adverse and severely adverse supervisory scenarios used in DFAST 2015; an overview of the analytical framework and methods used to generate the Federal Reserve’s projections, highlighting notable changes from last year’s program; and the results of the supervisory stress tests under adverse and severely adverse scenarios for the BHCs that participated in the DFAST 2015 pro-gram, presented both in the aggregate and for individual institutions.
The adverse and severely adverse supervisory scenarios used in DFAST 2015 feature U.S. and global recessions. In particular, the severely adverse scenario is characterized by a substantial global weakening in economic activity, including a severe recession in the United States, large reductions in asset prices, significant widening of corporate bond spreads, and a sharp increase in equity market volatility. The adverse scenario is characterized by a global weakening in economic activity and an increase in U.S. inflationary pressures that, overall, result in a rapid increase in both short- and long-term U.S. Treasury rates.
In conducting its supervisory stress tests, the Federal Reserve calculated its projections of a BHC’s balance sheet, risk-weighted assets (RWAs), net income, and resulting regulatory capital ratios under these scenarios using data provided by the BHCs and a set of models developed or selected by the Federal Reserve. As compared to DFAST 2014, the Federal Reserve enhanced some of the supervisory models to incorporate more detailed data. These changes are high-lighted in box 1. Specific descriptions of the supervisory models and related assumptions can be found in appendix B. The results of the DFAST 2015 projections suggest that, in the aggregate, the 31 BHCs would experience substantial losses under both the adverse and the severely adverse scenarios.

Publication Date:
Mar 10 2015
ISBN/EAN13:
150876820X / 9781508768203
Page Count:
148
Binding Type:
US Trade Paper
Trim Size:
8.5″ x 11″
Language:
English
Color:
Black and White
Related Categories:
Political Science / Public Policy / Economic Policy

14.95

Effects of a Carbon Tax on the Economy and the Environment

Effects of a Carbon Tax on the Economy and the Environment published on

Authored by Congressional Budget Office

Lawmakers could increase federal revenues and encourage reductions in emissions of carbon dioxide (CO2) by establishing a carbon tax, which would either tax those emissions directly or tax fuels that release CO2 when they are burned (fossil fuels, such as coal, oil, and natural gas). Emissions of CO2 and other greenhouse gases accumulate in the atmosphere and contribute to climate change-a long-term and potentially very costly global problem.

The effects of a carbon tax on the U.S. economy would depend on how the revenues from the tax were used. Options include using the revenues to reduce budget deficits, to decrease existing marginal tax rates (the rates on an additional dollar of income), or to offset the costs that a carbon tax would impose on certain groups of people. This study examines how a carbon tax, combined with those alternative uses of the revenues, might affect the economy and the environment.

Publication Date:
Nov 13 2014
ISBN/EAN13:
1503205185 / 9781503205185
Page Count:
30
Binding Type:
US Trade Paper
Trim Size:
8.5″ x 11″
Language:
English
Color:
Black and White
Related Categories:
Political Science / Public Policy / Economic Policy

12.95

Economic Report of the President March 2014: Together with The Annual Report of the Council of Economic Advisers

Economic Report of the President March 2014: Together with The Annual Report of the Council of Economic Advisers published on

Authored by United States Government Printing Office

This year’s Economic Report of the President describes how after 5 years of grit and determined effort, the United States is better-positioned for the 21st century than any other nation on Earth. We’ve now experi-enced 4 straight years of economic growth with more than 8 million new private-sector jobs. Our unemployment rate is the lowest it’s been in more than 5 years. Our deficits have been cut by more than half. For the first time in nearly 20 years, we produce more oil at home than we buy from the rest of the world. The housing market is rebounding, manufacturers are adding jobs for the first time since the 1990s, and we sell more of what we make to the rest of the world than ever before.

But in many ways, the trends that have threatened the middle class for decades have grown even starker. While those at the top are doing bet-ter than ever, average wages have barely budged. Inequality has deepened. Too many Americans are working harder and harder just to get by, and too many still aren’t working at all. Our job is to reverse those trends. It is time to restore opportunity for all-the idea that no matter who you are or how you started out, with hard work and responsibility, you can get ahead.

That’s why this must be a year of action. I’m eager to work with the Congress to speed up economic growth, strengthen the middle class, and build new ladders of opportunity into the middle class. But America does not stand still, and neither will I. Wherever and whenever I can take steps without legislation to expand opportunity for more American families, I will. Because opportunity is who we are. And the defining project of our generation is to restore that promise.

Simply put, this opportunity agenda has four parts. Number one is more new jobs. Number two is training more Americans with the skills to fill those jobs. Number three is guaranteeing every child access to a world-class education. And number four is making sure hard work pays off for every American.

With the economy picking up speed, companies say they intend to hire more people this year. We should make that decision even easier for them by closing wasteful tax loopholes and lowering tax rates for busi-nesses that create jobs here at home, and use the money we save in the process to create jobs rebuilding our roads, upgrading our ports, and unclogging our commutes. We should help America win the race for the next wave of high-tech manufacturing jobs by connecting businesses and universities in hubs for innovation. We should do more to boost exports and fund basic research. We should maintain our commitment to an all-of-the-above-energy strategy that is creating jobs and leading to a safer planet. Finally, we should heed the call of business leaders, labor leaders, faith leaders, and law enforcement, and fix our broken immigration sys-tem. Independent economists say this will grow our economy and shrink our deficits by almost $1 trillion in the next two decades. We should get it done this year.

Creating jobs is step one, but in this rapidly-changing economy, we also must make sure every American has the skills to fill those jobs. I’ve asked Vice President Biden to lead an across-the-board reform of America’s training programs to make sure they have one mission: training Americans with the skills employers need, and matching them to good jobs that need to be filled right now. That means more on-the-job training, and more apprenticeships that set a young worker on an upward trajectory for life. It means connecting companies to community colleges that can help design training to fill their specific needs.

I’m also convinced we can help Americans return to the workforce faster by reforming unemployment insurance so that it’s more effective in today’s economy. But first, the Congress needs to restore the unemploy-ment insurance it let expire at the end of last year, affecting around 2 mil-lion workers.

Publication Date:
Oct 29 2014
ISBN/EAN13:
1503015122 / 9781503015128
Page Count:
414
Binding Type:
US Trade Paper
Trim Size:
7″ x 10″
Language:
English
Color:
Black and White
Related Categories:
Political Science / Public Policy / Economic Policy

19.95

Ready to Work: Job-Driven Training and American Opportunity

Ready to Work: Job-Driven Training and American Opportunity published on

Authored by Ececutive Office of the President

In his 2014 State of the Union address, as President Obama called for “a year of action” and predicted “a breakthrough year for America” in 2014, he emphasized the vital priority of equipping Americans with the skills needed to realize the economic opportunity that a renewed American economy could provide.

Two days later, in Waukesha, Wisconsin, he signed a Presidential Memorandum on Job-Driven Training for Workers, assigning Vice President Biden and the Secretaries of Labor, Commerce, and Education – working closely with the National Economic Council, the Domestic Policy Council, the Council of Economic Advisers, the Office of Science and Technology Policy, and the Office of Management and Budget – to develop within 180 days an action plan to make America’s workforce and training system “more job-driven, integrated and effective.” The Presidential Memorandum called for this action plan to include “concrete steps to make federal workforce and training programs and policies more focused on imparting relevant skills with job-market value, more easily accessed by employers and job seekers, and more accountable for producing positive employment and earning outcomes for the people they serve.”

Under the leadership of Vice President Biden, Secretary of Labor Tom Perez, Secretary of Commerce Penny Pritzker, and Secretary of Education Arne Duncan, the Administration engaged in an intensive review to identify, initiate, and implement actions to make federal employment and training programs and policies more job-driven and effective, consistent with existing statutory authority.

This review benefitted from the work not only of the Departments of Labor, Commerce, and Education, but also from the constructive engagement of Cabinet Secretaries and leaders of employment, training, education, and workforce development programs in the Departments of Agriculture, Defense, Energy, Health and Human Services, Housing and Urban Development, Interior, Justice, Transportation, Veterans Affairs, the Social Security Administration, and Environmental Protection Agency, and from the expertise of the Department of the Treasury, the National Science Foundation, and the Office of Personnel Management.

The Presidential Memorandum on Job-Driven Training for Workers emphasized the importance of looking beyond our federal programs and agencies for answers and best practices, stating specifically that the Vice President and Secretaries “….shall consult with industry, employers and employer associations, state and local leaders, economic development organizations, worker representatives, education and training providers, workforce leaders, and relevant non-profit organizations.”

Publication Date:
Oct 29 2014
ISBN/EAN13:
150301441X / 9781503014411
Page Count:
76
Binding Type:
US Trade Paper
Trim Size:
8.5″ x 11″
Language:
English
Color:
Black and White
Related Categories:
Political Science / Public Policy / Economic Policy

14.95

Tracking Federal Funds to States and Congressional Districts using USAspending.gov – IF10231

Tracking Federal Funds to States and Congressional Districts using USAspending.gov – IF10231 published on

Finding accurate data on federal funds received by states and congressional districts (CD) may present challenges. The official website USAspending.gov is available to the public at http://www.USAspending.gov and posts federal agency-submitted data on obligations, including grants, loans, assistance, and contracts.  The database will eventually include Treasury Department expenditures data.

Date of Report: May 27, 2015
Pages: 2
Order Number: IF10231
Price: $5.95

To Order:  CLICK: HERE  to use the SECURE SHOPPING CART 

Email: congress@pennyhill.com 

Phone: 301-253-0881  

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Decadal Effort to Double Funding for Physical Sciences and Engineering Research Stalled – IN10263

Decadal Effort to Double Funding for Physical Sciences and Engineering Research Stalled – IN10263 published on

A decade ago, concerns about the effects of potentially inadequate federal investment in physical sciences and engineering on U.S. innovation, competitiveness, job creation, and prosperity led to presidential and congressional efforts to double funding for certain accounts over time periods ranging from 7 to 11 years. Actual appropriations, however, have fallen short of these goals. FY2015 appropriations for the targeted accounts is consistent with a doubling pace of nearly 22 years from the FY2006 level, and the President's FY2016 budget request does not mention a doubling goal.

Date of Report: 4/23/2015
Pages: 3
Order Number: IN10263
Price: $5.95

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How the Doubling Timeframe Affects the Increase in Purchasing Power of Funding for Physical Sciences and Engineering Research – IN10260

How the Doubling Timeframe Affects the Increase in Purchasing Power of Funding for Physical Sciences and Engineering Research – IN10260 published on

Like the tide and mountain winds, inflation is erosive, wearing away at the purchasing power of federal spending. Just as small investments grow to substantial sums over many years through the power of compounding interest, the inverse is true as well: compounded annual inflation devalues real purchasing power over time. The longer the time period, the more significant the reduction in purchasing power. The compounding effect of inflation is important to federal efforts that have as their goal the doubling of certain spending in nominal dollars. In 2006, President George W. Bush initiated an effort to double federal funding for physical sciences and engineering research. This effort was driven in part by concerns about U.S. competitiveness and its implications for U.S. economic growth, job creation, national security, and other national interests. It was also driven by a perception that the federal government had underinvested in these fields for some time. The five-year doubling of the National Institutes of Health budget (which comprises the majority of federal life sciences research funding) between FY1998 and FY2003 magnified this perception.

Date of Report: 4/21/2015
Pages: 2
Order Number: IN10260
Price: $5.95

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Major Entitlement Spending – IF10153

Major Entitlement Spending – IF10153 published on

The federal government faces long-term budget challenges. Some measures of fiscal solvency indicate that, under current policy, the United States faces a persistent future budgetary imbalance. Projections show that this is largely due to rising health care costs and the related increase in government-financed health care spending.  Federal spending is divided into three broad categories: discretionary spending, mandatory spending, and net interest. Mandatory spending is composed of budget outlays controlled by laws other than appropriation acts. Entitlement programs, such as Social Security and Medicare, make up the bulk of mandatory spending. In contrast to mandatory spending, discretionary spending is provided and controlled through appropriations acts. Net interest spending is the government’s interest payments on debt held by the public, offset by interest income that the government receives.

Date of Report: March 18, 2015
Pages: 2
Order Number: IF10153
Price: $5.95

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Debates over “Currency Manipulation” – IF10049

Debates over “Currency Manipulation” – IF10049 published on

Some Members of Congress and policy experts argue that U.S. companies and jobs have been adversely affected by the exchange rate policies adopted by China, Japan, and a number of other countries. They allege that these countries use policies to “manipulate” the value of their currency in order to gain an unfair trade advantage against other countries, including the United States.  Other analysts are more skeptical about currency manipulation being a significant problem. They raise questions about whether government policies have long-term effects on exchange rates; whether it is possible to differentiate between “manipulation” and legitimate central bank activities; and the net effect of currency manipulation on the U.S. economy.

Date of Report: January 20, 2015
Pages: 2
Order Number: IF10049
Price: $5.95

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Phone: 301-253-0881 

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Introduction to Financial Services: The Securities and Exchange Commission (SEC) – IF10032

Introduction to Financial Services: The Securities and Exchange Commission (SEC) – IF10032 published on

To help restore confidence in the securities markets in the wake of the stock market crash of 1929, Congress passed the Securities Exchange Act of 1934, which authorized creation of the Securities and Exchange Commission

(SEC). The SEC is an independent, nonpartisan regulatory agency responsible for administering federal securities laws. It has broad regulatory authority over significant parts of the securities industry, including stock exchanges, mutual funds, investment advisers, and brokerage firms.

Date of Report: December 22, 2014
Pages: 2
Order Number: IF10032
Price: $5.95

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e-mail:congress@pennyhill.com

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