BofA Accounting Mishap Reveals Flaws In Fed's Stress Tests

Law360, New York (April 30, 2014, 6:24 PM EDT) -- A $4 billion accounting error that caused the Federal Reserve to suspend Bank of America Corp.'s capital plan on Monday raised questions about how much stock the public should take in the Fed's stress tests, and experts say there may be little the Fed can do to increase confidence in the annual assessments of the banking system's health.

Stress testing — in particular, the Fed's annual Comprehensive Capital Analysis and Review program — has become one of the major pillars of the post-financial crisis regulatory structure,...
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