It never fails. Whenever I'm making an IRR presentation to hundreds of people at a conference or just to a small group at a board meeting, someone will always...ALWAYS...say, "I see you're running this 'shock analysis'...that's not very realistic, is it?" Well, the current news out of Russia should pretty much answer that question.
Russia Defends Ruble With Biggest Rate Rise Since 1998
Russia took its biggest step yet to shore up the ruble and defuse the currency crisis threatening its stricken economy. In a surprise announcement just before 1 a.m. in Moscow, the Russian central bank said it would raise its key interest rate to 17 percent from 10.5 percent, effective today. The move was the largest single increase since 1998...
12/16/2014 Bloomberg | www.bloomberg.com
To those who might respond by saying, "that's Russia not the United States - it wouldn't happen here..." I suggest they do a little research. Rates in this country were quite volatile in 1980. Who's to say it can't happen here again?