Federal Reserve To Test Big Banks' Financial Strength

The Fed wants to ensure the country's largest banks are prepared to weather another recession. The move comes as the debt crisis in Europe threatens to destabilize global markets. Banks will be required to show they have enough capital to continue lending money under severe economic conditions.

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STEVE INSKEEP, HOST:

NPR's business news begins with new stress tests for banks.

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INSKEEP: The Federal Reserve says it will again test the financial strength of the country's largest banks. The Fed wants to ensure they're prepared to weather another recession. That move comes as the debt crisis in Europe threatens to destabilize global markets. Banks will be required to show they have enough capital to continue lending money, even under severe economic conditions. The banks have to submit their results by early next year, and the Fed says it will make some of that information public.

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