Oops! My Calculator was Broken – Red Faces for both Bank of America and the Fed

One “tiny little error” resulted in red faces at both Bank of America (BAC) and the Federal Reserve when bank officials disclosed they had incorrectly calculated capital levels required for the annual stress tests.  The Fed apparently did not notice the error until Bank of America notified them. This would all be very funny except […]

Fed Says Largest Banks Would Lose Half Trillion Dollars Under Adverse Economic Conditions

Based on the results of the Federal Reserve’s stress tests, the nation’s 18 largest banks would collectively lose a massive $462 billion under an extremely adverse hypothetical economic scenario. Reflecting the severity of the stress scenario–which includes a peak unemployment rate of 12.1 percent, a drop in equity prices of more than 50 percent, a […]

Bank “Stress Tests” Results Due In March – Don’t Expect Anyone To Fail

Under the Dodd-Frank Act, the Federal Reserve is required to conduct stress tests which are forward-looking exercises to determine whether large institutions have sufficient capital to absorb large losses and support operations under severely adverse economic conditions. The supervisory stress tests include examining capital ratios, revenue and the size of potential losses.  The Federal Reserve […]

Bank Stress Tests Viewed As Fed Deception By Critics

Every banker knows that public confidence in the banking industry is essential. With the banking industry approaching a near meltdown last year, the Federal Reserve decided to conduct a series of “stress tests” on the country’s largest banks in order to restore confidence in the banking system.  After reviewing the results of the stress tests, […]