The U.S. Federal Reserve's Stress Test Results: The Beginning Of The End Or The End Of The Beginning For U.S. Banks? - S&P Global Ratings’ Credit Research

The U.S. Federal Reserve's Stress Test Results: The Beginning Of The End Or The End Of The Beginning For U.S. Banks?

The U.S. Federal Reserve's Stress Test Results: The Beginning Of The End Or The End Of The Beginning For U.S. Banks? - S&P Global Ratings’ Credit Research
The U.S. Federal Reserve's Stress Test Results: The Beginning Of The End Or The End Of The Beginning For U.S. Banks?
Published May 12, 2009
6 pages (2906 words) — Published May 12, 2009
Price US$ 600.00  |  Buy this Report Now

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Abstract:

The much-anticipated results of the stress-testing exercise the Federal Reserve Bank (Fed) undertook for the top banks in the U.S. came out on May 7, 2009. These show that 10 of the 19 largest banks need a total of $75 billion in capital to maintain at least 4% of common equity Tier 1 capital if the environment becomes a lot more adverse than experts currently expect. This compares to Standard&Poor's Ratings Services' assessment of an $18 billion need for these 19 banks. Despite the significantly higher capital requirements determined by the Fed's stress tests as compared to our stress tests, we do not see this as an unmanageable amount, and most management teams of the identified banks promptly

  
Brief Excerpt:

...May 12, 2009 The much-anticipated results of the stress-testing exercise the Federal Reserve Bank (Fed) undertook for the top banks in the U.S. came out on May 7, 2009. These show that 10 of the 19 largest banks need a total of $75 billion in capital to maintain at least 4% of common equity Tier 1 capital if the environment becomes a lot more adverse than experts currently expect. This compares to Standard & Poor's Ratings Services' assessment of an $18 billion need for these 19 banks. Despite the significantly higher capital requirements determined by the Fed's stress tests as compared to our stress tests, we do not see this as an unmanageable amount, and most management teams of the identified banks promptly issued statements about how they would raise the capital. If the rigor of the stress-testing process succeeds in allaying market uncertainties about bank solvency, we believe it could set the stage for the rehabilitation of the banking industry, which may include a return to funding...

  
Report Type:

Commentary

Sector
Global Issuers, Public Finance, Structured Finance
Format:
PDF Adobe Acrobat
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S&P Global Ratings’ Credit Research—S&P Global Ratings’ credit research provides analysis on issuers and debt obligations of corporations, states and municipalities, financial institutions, insurance companies and sovereign governments. S&P Global Ratings also offers insight into the credit risk of structured finance deals, providing an independent view of credit risk associated with a growing array of debt-securitized instruments.

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Cite this Report

  
MLA:
S&P Global Ratings’ Credit Research. "The U.S. Federal Reserve's Stress Test Results: The Beginning Of The End Or The End Of The Beginning For U.S. Banks?" May 12, 2009. Alacra Store. Sep 26, 2022. <http://www.alacrastore.com/s-and-p-credit-research/The-U-S-Federal-Reserve-s-Stress-Test-Results-The-Beginning-Of-The-End-Or-The-End-Of-The-Beginning-For-U-S-Banks-2274667>
  
APA:
S&P Global Ratings’ Credit Research. (). The U.S. Federal Reserve's Stress Test Results: The Beginning Of The End Or The End Of The Beginning For U.S. Banks? May 12, 2009. New York, NY: Alacra Store. Retrieved Sep 26, 2022 from <http://www.alacrastore.com/s-and-p-credit-research/The-U-S-Federal-Reserve-s-Stress-Test-Results-The-Beginning-Of-The-End-Or-The-End-Of-The-Beginning-For-U-S-Banks-2274667>
  
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