The research firm is set to release a report Tuesday that it says previews the results of the Fed’s 2017 Comprehensive Capital Analysis and Review stress test results for 16 superregional banks.
Though regulatory rigor has improved post-crisis, it would be hubris for the Fed to believe that it has found a magic formula that will predict with accuracy how any of the big banks will truly perform in the next downturn.
All 34 big banks demonstrate they could survive a severe recession; credit cards emerge as the biggest vulnerability, with a projected $100 billion in losses.
The test showed that banks face potentially heavy losses in certain loan categories under economic stress, particularly in the area of credit cards, counterparty losses and commercial and industrial lending.
Regional banks with big commercial property portfolios may have a tough time passing stress tests; Fed governor, comptroller of the currency discuss easing bank regulation.
The Fed is preparing to release the results of its annual stress tests in what is likely to be the last iteration of the post-crisis supervisory program before sweeping changes are made.
Following are notable cases where banks were tripped up by the Fed's stress tests either by flunking the numbers (or quantitative) part of the test or raising red flags on a qualitative basis.
Readers chime in on the GSE conservatorships, bitcoin’s future, regulatory relief for regional banks, a recent Supreme Court ruling on debt collection, and more.
One of the greatest factors hindering a full recovery following the 2008 crisis is improperly calibrated regulation, particularly of regional banking institutions.
