Fed stress test shows that US banks’ capitalization is solid, but approved shareholder payouts rise
July 1st 2019 (5.59mins)
Andrea Usai, Rita Sahu
In this episode of Moody’s Talks, Associate Managing Director Andrea Usai and Senior Credit Officer Rita Sahu discuss the results of the Federal Reserve’s annual stress test of large US bank holding companies. They explain that the overall results show that the banks have good risk management, stress testing frameworks and capitalization. But they also note that the elimination of the “qualitative objection” for most participants reduces public transparency around banks’ internal capital and risk management processes and may reduce managements’ incentive to maintain and improve these processes
Fed approves large US banks' capital plans though shareholder payouts rise
The 18 large US banks participating in the 2019 CCAR passed the Fed’s scrutiny of their capital planning and met quantitative minimums, supporting our view that capitalization remains solid.