InvestorWords.com
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.
Recommended Articles from InvestorGuide.com
Related Videos
Featured Advertiser
Get our free Term of the Day newsletter!



