Fed says top banks fared well in stress tests

Reuters– The majority of the largest banks will continue to have enough capital to satisfy regulators, even if they suffer a financial shock that includes unemployment hitting 13 percent and a 21 percent drop in housing prices, the Federal Reserve said on Tuesday.

The Fed, in releasing its annual stress test results, said 15 of the 19 largest banks would have satisfactory capital buffers, even after considering banks’ proposed dividend increases or share buybacks.

The regulator said Citigroup, Ally Financial and SunTrust banks fared worst under the supervisory stress ratios, with Tier 1 common capital ratios of 4.9 percent, 4.4 percent, and 4.8 percent, respectively.

The bank holding companies that came out top were Bank of New York Mellon with a Tier 1 common capital ratio of 13.1 percent under the hypothetical financial shock, State Street Corp with 12.5 percent and American Express with 10.8 percent.

Bank of America came in with 6.2 percent, and JPMorgan’s result was 5.9 percent.

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