Nation’s Biggest Banks Would All Withstand Recession, Fed Says
Next week, they will all have to pass another type of test from the Federal Reserve that is a more subjective measure of the banks’ planning and management processes. In the past, these so-called qualitative reviews have tripped up banks including Citigroup, which failed in 2014 even after demonstrating it had adequate capital.
.. On top of that, several Fed officials have recently said that for the nation’s biggest banks, future tests will become even more difficult, with stricter capital requirements.
.. “We need to have those eight most systemically important institutions more resilient than other banks in the economy,” he said.
.. Investors have worried that weakening employment could bring about an end to a period of low defaults, particularly in automobile lending and credit cards — which have been two areas of growth for the banks.