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Reply #30: Federal Reserve launches new round of stress tests [View All]

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Demeter Donating Member (1000+ posts) Send PM | Profile | Ignore Fri Nov-25-11 07:51 AM
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30.  Federal Reserve launches new round of stress tests

The Federal Reserve will force the biggest US banks to model a severe eurozone recession and a US unemployment rate of 13 per cent as part of stress tests launched on Tuesday, which will culminate in public disclosure of banks stressed capital levels.

The second annual comprehensive capital analysis and review is designed to ensure that US banks are adequately capitalised to weather a worsening economic storm at home and abroad, including a peak decline of 6.9 per cent in eurozone gross domestic product.

Banks that do poorly on the exercise which also judges their capital
planning will be prevented from paying out increased dividends or share buy-backs. The Fed said even for healthy banks proposed dividends of more than 30 per cent of net income would receive particularly close scrutiny.

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http://link.ft.com/r/R5WAEE/B5Q1NJ/6ADGM/NJF4WO/SP8DRX/...

YAWN, WHATEVER
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