31 of 33 large banks pass Fed's stress tests

[dealmaker]

31 of 33 large banks pass Fed's stress tests
Bank of America and Citigroup have stumbled on the Federal Reserve's tests in previous years, but theypassed this year, which means they are cleared to return profits to investors. The U.S. banking units of Deutsche Bank and Santander failed, just as they did last year. Morgan Stanley received conditional approval.(Wall Street Journal)




From Hedgeweek

 

[OddTrader]

Alert - 3 of 33 large banks still cannot fully pass Fed's stress tests!

Bank of America and Citigroup have stumbled on the Federal Reserve's tests in previous years, but they passed this year, which means they are cleared to return profits to investors. The U.S. banking units of Deutsche Bank and Santander failed, just as they did last year. Morgan Stanley received conditional approval.(Wall Street Journal)

 

[sprstpd]

Even during the financial crisis of 2008, a large percentage of the banks passed the Fed stress tests. What good is a test when it doesn't mean anything?

 

[S2007S]

This test is completely pointless..they think they can reassure everyone with the idea these tests work when in reality they are worthless tests just to make you believe everything would be fine and dandy if XYZ took place....

 

[OctopodeClub]

It's news, so it's certainly important to note that this may have a psychological impact on retail (and even perhaps institutional) investors and thus play a small part in shaping the markets.

More to the point, I think any news that doesn't involve Europe this week is good news in order to keep this (* artificial *) rally going. Maybe we can get all 5 days to be up this week, especially going into such a "feel good" weekend (4th of July for any non-americans out there!)

 

[curiousGeorge8]

Even during the financial crisis of 2008, a large percentage of the banks passed the Fed stress tests. What good is a test when it doesn't mean anything?

If I remembered correctly, the first stress test for US banks was done in 2009 not in 2008

https://en.wikipedia.org/wiki/2009_Supervisory_Capital_Assessment_Program

Each year the test is different. Now the question is whether the banks are too conservative as they either withdraw from or reduce their presence in some key markets, which makes these markets less safe.

 

[sprstpd]

These stress tests are equivalent to everyone getting a participation ribbon.