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New For 2019: No-Stress Stress Tests

Even Deutsche Bank won’t have to cram for this one.
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By Ryan McGilchrist [CC BY-SA 2.0 ], via Wikimedia Commons

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

The midterms are over. Donald Trump is either a lame duck or two years from elected Greatest Most Beautiful and Perfect President of America for Life (and, taking a page from the leaders he most admires, maybe beyond). That means the time has come to get that regulatory bonfire going in earnest, while there’s still time, starting with making stress tests multiple choice. And we’re not talking LSAT problem-level multiple choice. We’re talking old-school Global Studies Regents exam level multiple choice.

Fed Vice Chairman of Supervision Randal Quarles in a Friday speech said the agency was considering revisions that could make the test scenarios more consistent from year to year and give firms their results before they wrap up shareholder-return plans… Banks will likely welcome what Mr. Quarles outlined as a sweetening of an April proposal that was already set to ease the stress-testing burden….

Mr. Quarles also recommended that financial institutions with less than $250 billion in assets, which include SunTrust Banks Inc. andFifth Third Bancorp , should skip the 2019 tests as they are set to enter a two-year evaluation schedule under a different Fed proposal.

Fed to Further Overhaul Stress-Testing Regime, Making it Easier for Banks to Pass [WSJ]


Courtesy Federal Reserve.

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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.

michael barr

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Michael Barr’s also gonna have a real close look at those living wills.