So Goldman Sachs passed its stress test. Big freakin’ deal; everyone else did, too. This is Goldman Sachs we’re talking about, people. It’s not supposed to skate by with Cs. It’s supposed to be at the head of the class—especially when it comes to bringing home the dividends and buybacks to Ma and Pa Shareholder. And if it can’t clean up its act on its own, well, Ma and Pa may just have to bring that nice Moynihan boy over for some intensive tutoring.
Under a severe recession, Goldman’s total risk-based capital ratio dropped to a low of 8.1%. The Fed’s minimum is 8%.
While the results were good enough to pass the first round of the Fed’s stress tests, they will factor into the regulator’s decision next week about whether to approve the bank’s plan for rewarding shareholders with dividends or potential share buybacks.
Goldman Shareholders May Stress Out Over Test Results [WSJ MoneyBeat blog]
Big Banks Pass Muster in Latest Stress Tests [DealBook]
Fed Stress Tests Find Banks Adequately Capitalized [WSJ]