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Tuesday, March 13, 2012

Federal Reserve Announces Results of Stress Test

“The banking industry is pleased that the overwhelming majority of institutions passed the Federal Reserve’s stress tests with flying colors. The banking industry has worked hard to fortify its financial base since the financial crisis. The industry is now very well prepared for any challenging economic circumstances that could arise.

At the same time, we object to testing bank capital under theoretical conditions that are far more severe than even those seen during ‘the Great Recession.’ It unjustifiably prohibits some institutions from paying dividends to shareholders and could potentially impair their ability to raise capital and make loans. That is an unnecessary and ill-timed consequence of these stress tests given the essential role of banks in our still-recovering economy.”

By Frank Keating, ABA President and CEO

Read the Federal Reserve's release.

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