Bank stress tests give the Fed a pass grade too – ZAWYA

Bank stress tests give the Fed a pass grade too – ZAWYA

Bank stress tests give the Fed a pass grade too Bank stress tests give the Fed a pass grade too | ZAWYA MENA Edition HomeMarketsEquitiesArticleBank stress tests give the Fed a pass grade too Lenders can thank post-2008 changes for their hypothetical survival    The Federal Reserve building is set against a blue sky, amid the coronavirus disease (COVID-19) outbreak, in Washington, U.S., May 1, 2020. (The author is a Reuters Breakingviews columnist. The opinions expressed are her own.)SAN FRANCISCO  - Big banks did pretty well in this year's stress tests. But the Federal Reserve, which conducts the annual exams, gets a pass grade too. Even with a new pandemic-themed set of challenges, the system still comes out looking mostly solid - which suggests that a decade of reforms has succeeded in creating a financial sector that can weather even a once-in-several-lifetimes crisis.The 33 biggest lenders that the Fed oversees would in aggregate have a minimum Tier-1 capital ratio of 7.7% in a W-shaped recovery where the virus abates and then comes back in winter, the U.S. regulator reckons. That's better than the 4.5% seen as the minimum acceptable level. And it envisages a world worse than the usual "severely