Jan 28 U.S. regulators will release on March 7
the results of tests to determine how big banks would weather a
financial shock, and they will put out evaluations of the
largest banks' capital plans the following week, the Federal
Reserve said on Monday.
the 2010 Dodd-Frank financial oversight law required stress
tests to ensure that banks have big enough capital cushions to
survive a severe recession or other economic jolt.
Banks with more than $50 billion in assets were required to
go through the tests this year. In the toughest hypothetical
economic scenario used, U.S. unemployment would spike up to
about 12 percent, Europe and Japan would see recessions, and
economic activity in China would weaken sharply.
The Fed will first release the results of the Dodd-Frank
tests, which assume no changes in dividend payments and no
common stock repurchases to make it easier to compare the
results from different firms.
The Fed also will evaluate whether the largest bank holding
companies' individual capital plans are sufficient to survive a
financial shock. Those results will be released on March 14, the
Banks will get one chance to adjust their plans to
repurchase stock or boost dividends before the Fed releases its
final capital plan assessment.
Last year, the Fed turned down Citigroup Inc's plan to
return capital to shareholders. The firm had been expected to be
able to raise its quarterly dividend.
The Fed also released on Monday details of a global market
shock that will be used in tests of six bank holding companies
with large trading operations. Those banks are Citigroup, Bank
of America Corp, Goldman Sachs Group Inc,
JPMorgan Chase & Co, Morgan Stanley and Wells
Fargo & Co.