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Big Banks Better Start Studying For This Year’s Stress Tests

This one's gonna be a hoot.
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And by studying we mean digging through the couch cushions, because the most powerful man in banking is getting ready to make those stress tests CFA-exam-hard, and you know what that means.

Fed governors Daniel Tarullo and Jerome Powell, in separate public comments on Thursday, said the Fed would require eight of the largest U.S. banks to maintain more equity to pass the central bank’s annual “stress tests.”

“Effectively, this will be a significant increase in capital,” Mr. Tarullo said on Bloomberg television.

Fed Governors Signal Bigger Capital Requirements Looming [WSJ]
The Most Powerful Man in Banking [WSJ]


By Ryan McGilchrist [CC BY-SA 2.0 ], via Wikimedia Commons

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By AKS.9955 (Own work) [CC BY-SA 4.0], via Wikimedia Commons

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And why not? It’s not like they’ll need those capital buffers anymore, and there’s much to celebrate.

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He's pretty sure the vast majority of them are pointless.

House of Iniquity and Ineptitude. By Dan SmithRdsmith4 (Own workOwn work) [CC BY-SA 2.5], via Wikimedia Commons

Banks Have A Right Mind To Sue The Fed Over Stress Tests

Apparently said tests are illegal, according to a group whose members "include senior executives at big banks J.P. Morgan Chase & Co., Citigroup Inc., Goldman Sachs Group Inc., Wells Fargo & Co., and State Street Corp."