US regulators, lawmakers support Volcker rule revamp at hearing

US regulators, lawmakers support Volcker rule revamp at hearing

In the first round of its annual bank stress tests, the Fed on Thursday said that 34 of the largest lenders in the USA - including Goldman Sachs, JP Morgan, Morgan Stanley, Bank of America and Citigroup - had made significant improvements to their defenses since the 2008 financial crisis.

For the third time in as many years, all 34 of the biggest banks in the United States met the minimum capital standards in the first half of the Fed stress tests created to safeguard against another financial crisis on Thursday. The entire exercise is meant to regularly check the health of banks by running the numbers on how they'd fare in the event of another economic crisis.

The Fed determines this by making a number of assumptions about the economy and financial system, then estimating what would happen to the nation's biggest banks under those assumptions.

Overall, officials found that in the most severe scenario, companies would have suffered about $383 billion in losses on loans.

Fed Governor Powell said recently that regulators will share more information with the industry during next year's exams after bankers complained the process was too opaque.

The results of the CCAR - in which banks' buyback and dividend plans are evaluated - are set for release after the market close on Wednesday.

The Fed has changed the emphasis in stress scenarios from year-to-year to keep banks from managing their portfolios to the test.




United States unemployment would rise to 10%, accompanied by a 35% drop in commercial property prices and pressures on corporate loan markets as well. This is well ahead of the 4.5% regulatory threshold, and better than the 8.4% ratio in the previous year's worst-case test.

The results portrayed a picture of increasing resilience in the banking sector, with the 34 participating firms having added US$750 billion (RM3.22 billion) in common equity capital since 2009.

The Federal Reserve says all of the country's big banks passed this year's stress test, in which regulators create a scenario where unemployment surges and banks lose hundreds of billions of dollars in loans.

While next week's release of phase two results may change things, the current picture looks good for President Donald Trump and GOP lawmakers who have argued that the regulations implemented after the 2008 financial collapse are no longer necessary and place an unnecessary burden on financial institutions.

But the bank can not do so without the Fed's approval. Bank executives and many investors hope the Fed will allow lenders to put a lot more capital toward stock buybacks and dividends. This is because only the U.S-based subsidiary that was tested represents only a small, low-risk part of the German banking giant's diversified banking operations in the U.S.

The firms reviewed included Bank of America, JP Morgan Chase and Wells Fargo.

Related Articles

  • Here's What Has Happened at the Bill Cosby Trial So Far

    Here's What Has Happened at the Bill Cosby Trial So Far

    Cosby arrived in court Wednesday along with his longtime hair stylist John Achison and Achison's wife, actress Sheila Frazier. Constand reiterated what she told the court Tuesday: Cosby had made romantic overtures towards her, but she brushed him off.

    Uber finally adds tipping, but only in select cities to start

    Shannon Liss-Riordan, an attorney who represents drivers in the California and MA lawsuits, welcomed the change. These tips will not be charged a service fee, so the driver will receive the entire amount.
    Kushner arrives to try for Israeli-Palestinian breakthrough

    Kushner arrives to try for Israeli-Palestinian breakthrough

    Abbas has also cut the salaries of tens of thousands of former employees in Gaza , hurting the territory's already poor economy. Kushner said Trump asked him to personally convey the condolences of the American people.
  • Controversial dog meat festival celebrated despite ban rumors — China Focus

    Controversial dog meat festival celebrated despite ban rumors — China Focus

    He said: 'Business during the festival goes up about ninefold. "But don't worry, we always manage to have enough dogs", he said. One photographer from AFP was asked to leave, and officers requested that all his photos of the market be deleted.
    Cuban Americans speak out ahead of Trump's Little Havana visit

    Cuban Americans speak out ahead of Trump's Little Havana visit

    Trump had previously said he supported restoring diplomatic relations but wished the US had negotiated a better deal. Reporters were told that Trump is open to a deal with Cuba, but that he doesn't support the current "bad" agreement.

    FIFA warns Mexico over discriminatory chants at Confed Cup

    The post Confed Cup: Mexico Overcome "Stubborn" New Zealand, Go Atop Group A appeared first on Complete Sports Nigeria . Portugal took the lead in Group A on Wednesday evening in Moscow thanks to a goal from 32-year-old Cristiano Ronaldo.
  • Portugal goal against Mexico annulled after video review

    The result left Mexico second in Group A and Portugal third following Russia's 2-0 victory over New Zealand on Saturday. The result left European champion Portugal and Gold Cup victor Mexico trailing host Russian Federation in Group A.
    Spalletti is latest coach to occupy Inter hot seat

    Spalletti is latest coach to occupy Inter hot seat

    Roberto Mancini was sacked just weeks before the start of the season while his replacement, Frank De Boer, lasted just under three months.

    Wife of James Hodgkinson: 'I was shocked'

    He was squeezing off five or six rounds at a time, according to the report of the incident, and fired about 50 shots in all. Investigators may get some clues as to Hodgkinson's motivation by talking to family members and others who knew him.
  • Cameroon coach Broos seeks brighter start

    Cameroon coach Broos seeks brighter start

    The victor on Thursday in Kazan will be guaranteed a place in the semifinals of the World Cup warm-up event. The teams last met in a 2014 friendly, with Germany winning 1-0 with a goal by Mario Goetze.
    O'Mahony to captain Lions, Farrell starts ahead of Sexton

    O'Mahony to captain Lions, Farrell starts ahead of Sexton

    Kieran Read has recovered from injury and will captain New Zealand in Saturday's first Test against the British and Irish Lions . But the test pair can not expect the same leeway against the Lions who will also be eager to test SBW's defence.
    Queen's Speech ditched next year to allow greater Brexit laws scrutiny

    Queen's Speech ditched next year to allow greater Brexit laws scrutiny

    But Downing Street confirmed that the invitation to Mr Trump stands and said it did not feature because a date is yet to be fixed. Each Parliament is usually divided into five parliamentary years called "sessions", beginning and ending in the spring.