Posted by: youngragingbull | March 8, 2013

17/18 major U.S. banks above Fed standard in stress test

Ally Financial was the only bank that fell below a generally accepted regulatory capital standard based on initial Federal Reserve stress test results released Thursday seeking to find out if 18 of the largest financial institutions can withstand a deep recession.

Specifically, the test, designed to assess whether reserves were sufficient to withstand another crisis like the credit crunch of 2008, showed that Ally, the former GMAC, held 1.5% in capital set aside under a measure called Tier 1 common capital ratio, according to a Fed statement.

Ally’s figure is significantly below the generally accepted standard of 5%.

Two other institutions came close to falling below the 5%: Goldman Sachs Group Inc. at 5.8% and Morgan Stanley at 5.7%.


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