Largest US banks all pass latest round of Fed 'stress tests'
Source: AP-Excite
By MARTIN CRUTSINGER and KEN SWEET
WASHINGTON (AP) — All of the nation's 31 largest banks are adequately fortified to withstand a severe U.S. and global recession and keep lending, the Federal Reserve said Thursday.
Results of the Fed's annual "stress tests" show that as a group, the 31 banks are stronger than at any time since the 2008 financial crisis struck, thanks to a steadily recovering economy. The results build on positive outcomes from last year's stress tests.
Industry analysts say the most critical tests for the industry will come next week. That's when the Fed will announce whether it's approved each bank's request, if one has been made, to raise dividends or repurchase shares. Those results will be based on how each bank would fare in a severe recession if it took such steps.
"This week's tests are a more modest standard than what we will get next week," said Cayetano Carrasco-Gea, senior director at Moody's Analytics. "We will see a few banks fail next week."
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This combination made from file photos shows bank branches of, clockwise from top left, Bank of America, Chase, Wells Fargo, and Citibank. All of the nation's 31 largest banks are adequately fortified to withstand a severe U.S. and global recession and keep lending, the Federal Reserve said Thursday, March 5, 2015. (AP Photo)
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