The Globe and Mail reports in its Thursday, Aug. 16, edition that Canada's largest banks are better prepared to weather a homegrown housing crisis than they were two years ago, says a new report from Moody's Investors Service. The Globe's James Bradshaw writes that Moody's updated its stress test for Canada's seven largest banks, which imagines a severe -- though still unlikely -- shock to the housing market. The Moody's stress test contemplates a dire, American-style housing crash, assuming a punishing 11-per-cent default rate on banks' mortgages coupled with housing price declines of 25 per cent to 35 per cent, as well as other compounding factors. In other words, this assessment is not testing for an ordinary downturn -- it simulates a black swan event. Stress tests such as this one offer a timely way to gauge banks' potential vulnerabilities at a moment when regulators have tightened rules to curb risky mortgage lending. Of the seven banks, Canadian Imperial Bank of Commerce would fare the worst in Moody's stress-test scenario. The other banks tested in the Moody's analysis are Toronto-Dominion Bank, Royal Bank of Canada, Bank of Nova Scotia, Bank of Montreal, National Bank of Canada and Desjardins Group.