stress test

Definition

A test conducted to determine if a financial institution has enough capital on hand to survive during a prolonged economic downturn. This type of test is conducted by placing the institution under a certain level of stress and seeing how the institution performs under the pressure. The United States conducted a round of stress testing in 2009 on large financial institutions to determine how stable the institutions truly were, in this period of general economic instability.

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streetable stretch annuity