Fed Stress Tests Find Biggest Banks Meet Capital Thresholds
Under the tests, Goldman Sachs fell very close to a minimum requirement for one measure of capital.
.. Next Wednesday, the banks will find out if the Fed has approved their plans to distribute capital to shareholders through dividends and stock buybacks. Banks that fell close to minimum capital levels on Thursday may have to scale back their requests to pay out capital to avoid going below the minimum thresholds.
.. The stress tests also underscore an important shift in power within the Fed that took place after the financial crisis.
The reorganization reduced the sway of the Fed’s regional banks, including the Federal Reserve Bank of New York, which traditionally had outsize influence because it oversees the nation’s largest institutions, including JPMorgan and Citigroup. The post-crisis changes effectively put more regulatory power in the hands of the central body of the Fed, known as the Federal Reserve Board.
.. The board, not the New York Fed, decided that Citigroup had failed last year.