Arab Today, arab today only 1 of 18 us banks fails in crisis stress tests
Last Updated : GMT 03:40:40
Arab Today, arab today
Arab Today, arab today

Success proves financial sector ‘resiliency’

Only 1 of 18 US banks fails in crisis stress tests

Arab Today, arab today

Arab Today, arab today Only 1 of 18 US banks fails in crisis stress tests

Stress tests aim to project crisis-like conditions on capital strength
Washington – Arabstoday

Stress tests aim to project crisis-like conditions on capital strength Washington – Arabstoday All but one of 18 top US banks passed tough stress tests aimed at seeing if the financial industry could weather a new deep crisis, the Federal Reserve announced on Thursday.
Government-controlled Ally Financial, the rescued former finance arm of General Motors, was the only bank to fail the test of capital strength, AFP has reported.
Seventeen of the banks tested showed their capital levels would hold up above a five percent minimum threshold if the economy were again rocked with the kind of crisis that sent the US financial system reeling in 2007-2008.
The test showed the banks collectively were much stronger than a year ago, with their aggregate common capital ratio holding up at 7.7 percent, even after losing $462bn in the theoretical crisis scenario.
"The stress tests are a tool to gauge the resiliency of the financial sector," said Daniel Tarullo, a member of the Fed's Board of Governors.
"Significant increases in both the quality and quantity of bank capital during the past four years help ensure that banks can continue to lend to consumers and businesses, even in times of economic difficulty."
The tests measured the banks' abilities individually and collectively to withstand a fresh crisis involving a 50 percent plunge in equity prices, a fall of housing prices by 20 percent, and unemployment shooting to 12.1 percent, all of which would savage the banks' loan and investment assets.
Starting from the third quarter 2012 level of 11.1 percent, average Tier 1 common capital ratio -- a measure of core equity capital against risk assets -- sank to 7.7 percent over nine quarters, the Fed said.
That compared with their actual 5.6 percent level at the end of 2008, in the middle of the last financial crisis.
The overall result improved from last year's stress tests, when gross losses in a similar catastrophe scenario ran up to $534bn.
Four banks failed the test then, though there was a difference in the test set-up.
The banks had to submit their real capital plan, on investments, paying dividends and launching stock buybacks for instance, before the tests were completed, so that the plans were incorporated into the tests.
This year, the banks' capital plans will be reviewed next week, and so are not incorporated into the stress tests.
Banks continued to assail the tests as understating their capital foundations, with Ally accusing the Fed of using "flawed assumptions" that reached "implausible" loss rates for the loans it holds.
American Bankers Association president Frank Keating objected to "the black-box nature of these tests" that "makes it difficult for banks to effectively improve how they manage their capital positions."
Nevertheless, the results "are further proof that the banking industry has rapidly regained its health and is strong enough to withstand even the most challenging economic circumstances," he added.

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 only 1 of 18 us banks fails in crisis stress tests Arab Today, arab today only 1 of 18 us banks fails in crisis stress tests

 



Arab Today, arab today
Arab Today, arab today Prepares to present her new collection

GMT 14:29 2017 Monday ,20 February

Prepares to present her new collection
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 Optimism on the front line

GMT 07:24 2017 Monday ,20 February

Optimism on the front line
Arab Today, arab today Murder of 2 reporters in Dominican Republic

GMT 22:45 2017 Thursday ,16 February

Murder of 2 reporters in Dominican Republic

GMT 10:06 2017 Friday ,17 February

South Korea's Hanjin Shipping declared bankrupt

GMT 09:26 2017 Friday ,17 February

Samsung's history tainted by run-ins with the law

GMT 09:20 2017 Friday ,17 February

Samsung heir arrested in corruption probe

GMT 10:26 2017 Thursday ,16 February

Dollar, equities stutter in Asia after Trump rally

GMT 08:45 2017 Thursday ,16 February

Hanjin saga reveals S.Korea corporate governance flaws

GMT 09:40 2017 Wednesday ,15 February

Heineken profits drained in 2016 by currency turmoil

GMT 09:10 2017 Tuesday ,14 February

Sharjah Chamber Eyes Strong Economic Ties with Belgium
View News in Arabic - Business: أخبار الأعمال
Arab Today, arab today
Arab Today, arab today
Arab Today, arab today Kidogo provides childcare for underserved

GMT 20:24 2017 Wednesday ,15 February

Kidogo provides childcare for underserved
Arab Today, arab today Tragic fluctuations of Bakhtiari's life revealed

GMT 06:50 2017 Wednesday ,15 February

Tragic fluctuations of Bakhtiari's life revealed
Arab Today, arab today London to tax old cars

GMT 14:06 2017 Friday ,17 February

London to tax old cars
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 Egypt to hold first session of Arab film festival

GMT 21:11 2017 Saturday ,18 February

Egypt to hold first session of Arab film festival
Arab Today, arab today Teach monkeys to recognize themselves in mirror

GMT 20:41 2017 Wednesday ,15 February

Teach monkeys to recognize themselves in mirror

GMT 07:30 2017 Saturday ,18 February

Actress Nadeen Al Rassi views art as her entity

GMT 06:40 2017 Friday ,10 February

MP calls for removing text from Islamic story

GMT 19:10 2017 Friday ,17 February

Hats, scarves add beauty to women

GMT 10:26 2017 Tuesday ,14 February

Emergency UN meeting in Harare

GMT 23:29 2017 Thursday ,16 February

Home built on sand castles-style costs $8m

GMT 21:49 2017 Thursday ,16 February

Scientists develop new therapy

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 13:16 2017 Tuesday ,14 February

First fashion model with Down syndrome
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