NEW YORK (CNNMoney.com) - The Obama administration unveiled plans aimed at assessing the health of the nation's leading lenders Wednesday, particularly banks' ability to withstand more dire economic conditions.
The so-called "stress test" program, which was first hinted at earlier this month when the White House rolled out its financial recovery plan, would require major banks like Citigroup, Bank of America and JPMorgan Chase to estimate firmwide losses for the next two years and their ability to absorb such losses.
The program would require financial institutions to offer loss projections across their entire loan and securities portfolios, using consensus economic expectations and a "more adverse" scenario in which unemployment climbs above 10% and home prices decline another 20%.
The hope is that the tests, which will focus on banks with at least $100 billion in assets, would help regulators identify which banks may require additional government support.
Regulators said they hope to complete their examinations as quickly as possible, but all determinations would be made no later than the end of April.
Shares of struggling financial giants, including Bank of America and Citigroup, remained lower following the news. Other large banks were also lower, including Wells Fargo, which declined 2%.
Many big banks have managed to eke out gains this week as top administration officials downplayed fears that the government may have to step in and take control of the country's largest financial institutions.