WASHINGTON (AP) - Independent investigators say a government
test of whether 19 major banks could survive a further downturn in
the economy may have relied on too rosy a scenario.
In a report released Tuesday, the Congressional Oversight Panel
for the government's $700 billion financial rescue effort says the
test should be repeated.
The panel says that while the Federal Reserve used a
"conservative and reasonable" approach to assessing the health of
the nation's biggest banks, the Fed's worst-case scenario does not
go far enough.
For example, the "stress tests" conducted by the Fed were
based on the 2009 unemployment rate average of 8.9 percent.
Unemployment in May climbed to 9.4 percent.
Elizabeth Warren, the Harvard University law professor who heads
the panel, was expected to testify on Tuesday before the Joint
Last month, the Fed found that 10 of the 19 banks needed