Stress tests show US banks have room to improve - Tarullo

WASHINGTON, April 10 Tue Apr 10, 2012 10:01am EDT

WASHINGTON, April 10 (Reuters) - Large U.S. banks did well under a Federal Reserve stress test completed earlier this year but there is room for improvement, Federal Reserve Governor Daniel Tarullo said on Tuesday.

Tarullo said some banks still have a significant amount of work to do to improve the amount and quality of capital on their books.

"There appears to be room for improvement at virtually every firm, and at some firms the amount of work needed is still significant," Tarullo said in remarks prepared for delivery at a conference in Chicago. "This will remain a major focus of supervisory efforts, in next year's capital review, and more generally."

Tarullo said the Fed plans to make some changes to how it administers the annual stress tests. For instance, the Fed's decision on whether a bank can increase its stock dividends will now go into effect in the second quarter instead of the first quarter, Tarullo said.

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