The FED performed its annual stress test (required by the Dodd-Frank law) on
15 19 banks and 4 of the banks failed the test. These 4 banks are Citigroup, SunTrust, Ally Financial, and MetLife. The FED stress tests suggest that those banks would not have satisfactory capital buffers if they were to suffer a financial shock. The numbers (Tier 1 common capital ratios):
- Cigitroup: 4.9%
- Ally Financial: 4.4%
- SunTrust Bank: 4.8%
- MetLife: 6%
Citigroup performed the worst in this test. CEO Vikram Pandit is sure to be all stressed out over it, poor guy.
Still, most other banks passed the test, which helped the market (which seems to be made of teflon these days. We’re sure that will last…)