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Bank ‘Stress Tests’ Results Clear Way for Wall Street to Reward Investors - ABI

The Federal Reserve yesterday gave clean bills of health to most of the largest American banks, allowing them to return money to shareholders, but it forced Goldman Sachs and Morgan Stanley to freeze such payouts around last year’s levels, the New York Times reported. The Fed said that all of the nation’s very biggest banks — Bank of America, Wells Fargo, Citigroup, Goldman Sachs, Morgan Stanley and JPMorgan Chase — passed the second round of the central bank’s “stress tests,” which gauge whether financial institutions have enough capital and are sufficiently well-managed to continue lending during periods of financial upheaval. The tests were intended to gauge the health of 35 banks, and regulators said they would allow 34 of them to pay dividends and buy back their own shares, a boon for investors who have been eager to benefit from the banks’ record profits.

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