According to the Federal Reserve website, the Dodd-Frank stress tests "are a set of forward-looking exercises conducted both by the Federal Reserve and by financial companies regulated by the Federal Reserve...intended to ensure institutions have sufficient capital to absorb losses and support operations during adverse economic conditions so that they do not pose risks to their communities, other institutions, or the broad economy."
Sounds good. So, what happens when one of the big banks hit hardest by the 2008 financial crisis passes with flying colors?
