Stress Tests Should Be More Stressful.

The article analyzes the failure of stress tests established by the Dodd-Frank Wall Street Reform and Consumer Protection Act that were supposed to prevent bank crisis. It reveals the problems with the models that Dodd-Frank uses to predict risks when it devises its stress tests. It looks forward to the implementation of reforms such as raising capital requirement for regional banks and inclusion of worst possible economic case interest rate shock assumptions to restore balance and credibility.