Fed Plans for Biggest Banks to Undergo New Stress Tests to Evaluate Soundness

By artappraiser on Wed, 11/23/2011 - 11:35am |

By Eric Dash, New York Times, Nov. 22/23, 2011

The Federal Reserve said Tuesday that it was planning for the nation’s biggest banks to undergo another round of stress tests to determine whether they are sound enough to raise their stock dividends or buy back shares. [....]

This time, a few new twists are planned.

Unlike the previous exams, which focused on financial conditions in the United States, the new tests will require several of the big Wall Street banks to assess the potential effect of a sudden downturn on European bank loans and sovereign debt. And in an attempt to provide investors with more information, the Fed will publish its revenue and loss estimates for each of the large banks it reviews.

The Fed will also expand the scope of the exams to 31 large banks, up from the 19 biggest. [....]

URL:

http://www.nytimes.com/2011/11/23/business/number-of-at-risk-banks-declines.html?ref=todayspaper