Arab Today, arab today major banks in us all pass first phase of stress tests
Last Updated : GMT 08:14:34
Arab Today, arab today
Arab Today, arab today

Major banks in US all pass first phase of stress tests

Arab Today, arab today

Arab Today, arab today Major banks in US all pass first phase of stress tests

The 31 largest banks in the United States
Washington - AFP

The 31 largest banks in the United States passed the first phase of regulatory stress tests, the Federal Reserve announced Thursday.
But the three leading investment banks Goldman Sachs, JPMorgan Chase and Morgan Stanley were among the worst performers, mainly because of their greater exposures to capital markets.
In tests of their strength to withstand a severe economic crisis -- one worse than that of 2008 -- all the banks proved capable of maintaining more than the minimum 5.0 percent level of core capital.
At that level, the Fed believes that the banks will not weigh the economy down and will be able to continue supporting economic activity -- which was not the case during the crisis.
But the tests showed the investment banks with the largest exposure to capital markets came out among the weakest: Goldman's Tier 1 capital ratio fell to 6.3 percent, JPMorgan 6.5 percent, and Morgan Stanley 6.2 percent.
The worst performer, as in last year's stress tests, was Zions Bancorp of Salt Lake City, which barely topped the minimum with a core capital ratio of 5.1 percent.
Also coming in low in the severe-crisis scenario was BBVA Compass Bancshares, at 6.3 percent.
- Industry growing stronger -
But as a group the banks were stronger than in the 2014 tests, and it was the first time that no bank had fallen under the 5.0 percent level since the tests began in 2009.
Their average actual Tier 1 capital ratio going into the test was 11.9 percent, up from 11.5 percent a year ago. In the test the group average fell to 8.2 percent, compared with 7.6 percent last year.
"The largest US-based bank holding companies continue to build their capital levels and to strengthen their ability to lend to households and businesses during a period marked by severe recession and financial market volatility," the Fed said.
The tests, instituted in the wake of the 2008 crisis which bared extreme vulnerabilities in the banking system, sought to determine if individual banks and the system as a whole could weather a prolonged recession in which the economy contracts 4.5 percent in one year and the unemployment rate shoots up four percentage points.
That scenario wiped out $490 billion worth of bank assets, close to the amount in last year's tests, but overall the banks proved they could stand the test.
The tests added this year the impact of a series of corporate defaults to which the investment banks would be most vulnerable.
Goldman barely topped another key measure of strength, the total risk-based capital ratio. At the end of the test it had 8.1 percent, just above the minimum 8.0 percent threshold.
The Fed made no comment on individual banks, but noted the steady improvement of the industry overall since the crisis.
"Higher capital levels at large banks increase the resiliency of our financial system," Federal Reserve Governor Daniel Tarullo said.
"Our supervisory stress tests are designed to ensure that these banks have enough capital that they could continue to lend to American businesses and households even in a severe economic downturn."
The tests form the basis of the Federal Reserve's review of banks' capital plans, crucially whether they can distribute benefits to shareholders via dividends and share buybacks that effectively reduce their capital base.
Those judgements will come from the Fed next week.
Frank Keating, president of the American Bankers Association, said that with total industry capital of $1.7 trillion, the tests show that banks "are well positioned to continue serving as a critical driver of our economic growth going forward."

 

Name *

E-mail *

Comment Title*

Comment *

: Characters Left

Mandatory *

Terms of use

Publishing Terms: Not to offend the author, or to persons or sanctities or attacking religions or divine self. And stay away from sectarian and racial incitement and insults.

I agree with the Terms of Use

Security Code*

Arab Today, arab today major banks in us all pass first phase of stress tests Arab Today, arab today major banks in us all pass first phase of stress tests

 



Arab Today, arab today
Arab Today, arab today Nohan Seyam designs beautiful accessories

GMT 20:02 2017 Tuesday ,21 February

Nohan Seyam designs beautiful accessories
Arab Today, arab today Tourism shows signs of recovery

GMT 09:59 2017 Monday ,20 February

Tourism shows signs of recovery
Arab Today, arab today Sarah Belamesh designs antiques of "ceramic"

GMT 19:45 2017 Monday ,20 February

Sarah Belamesh designs antiques of "ceramic"
Arab Today, arab today 11 family members dead in rebel push

GMT 07:57 2017 Tuesday ,21 February

11 family members dead in rebel push
Arab Today, arab today To probe sexual harassment claims

GMT 10:08 2017 Tuesday ,21 February

To probe sexual harassment claims
View News in Arabic - Business: مصارف
Arab Today, arab today
Arab Today, arab today
Arab Today, arab today To hold social dialogue over secondary school

GMT 07:43 2017 Wednesday ,22 February

To hold social dialogue over secondary school
Arab Today, arab today 63-Year-Old Woman Delivers Baby

GMT 12:35 2017 Tuesday ,21 February

63-Year-Old Woman Delivers Baby
Arab Today, arab today Small ponds have outsized impact

GMT 15:53 2017 Tuesday ,21 February

Small ponds have outsized impact
Arab Today, arab today Pluto's unruly moons

GMT 06:31 2015 Thursday ,04 June

Pluto's unruly moons
Arab Today, arab today Nissan enhances sales in most markets

GMT 14:08 2017 Monday ,20 February

Nissan enhances sales in most markets
Arab Today, arab today Competes Sweden and Germans by S90

GMT 22:36 2017 Thursday ,16 February

Competes Sweden and Germans by S90
Arab Today, arab today Janat pleased for issuing 'Good Morning'

GMT 06:41 2017 Monday ,20 February

Janat pleased for issuing 'Good Morning'
Arab Today, arab today London to tax old cars

GMT 14:06 2017 Friday ,17 February

London to tax old cars

GMT 06:34 2017 Sunday ,19 February

Ahmed Fahmy stresses he did not ignore singing

GMT 06:50 2017 Wednesday ,15 February

Tragic fluctuations of Bakhtiari's life revealed

GMT 12:22 2017 Monday ,20 February

Kanye West puts hijab-wearing model

GMT 20:41 2017 Wednesday ,15 February

Teach monkeys to recognize themselves in mirror

GMT 23:29 2017 Thursday ,16 February

Home built on sand castles-style costs $8m

GMT 05:15 2017 Tuesday ,21 February

Omega 3 can reduce asthma cases

GMT 19:16 2017 Friday ,17 February

Aziz House ready to host the tourists

GMT 13:12 2015 Saturday ,09 May

Sheikh Sultan opens Sharjah Centre

GMT 12:39 2017 Monday ,20 February

newest smartphone another winner for Huawei

GMT 16:08 2017 Wednesday ,15 February

Shawsh reveals her collection "Jewelry of dreams"
Arab Today, arab today
Arab Today, arab today
 
 Arab Today Facebook,arab today facebook  Arab Today Twitter,arab today twitter Arab Today Rss,arab today rss  Arab Today Youtube,arab today youtube  Arab Today Youtube,arab today youtube
arabstoday arabstoday arabstoday arabstoday
arabstoday arabstoday arabstoday
arabstoday
بناية النخيل - رأس النبع _ خلف السفارة الفرنسية _بيروت - لبنان
arabstoday, Arabstoday, Arabstoday