"Stress test" assumptions may not be pessimistic enough

03/2/2009 | NYTimes.com

The government's "stress tests" of financial institutions are based on a baseline scenario and a "more adverse" situation. Even the latter scenario may not be pessimistic enough given recent economic data. The scenario assumes that the economy will contract 3.3% in 2009. In the fourth quarter of 2008, the economy shrunk 6.2%.

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