“Where stress tests are concerned, callCitigroup “most improved.”
The bank posted an 8.3 percent tier 1 common capital ratio – the highest of its peers – under the Federal Reserve’s annual stress tests, which show how financial institutions would fare amid severe economic crisis.
While the tests have been carried out for three years, this is the first that it’s been tackled in two, separate parts: The first, the performance of the banks on the Fed’s models. The second, the Fed’s sign-off on each bank’s plan to return capital to shareholders.
The splitting of the tests came after Citigroup in 2012 cleared the capital hurdle, but saw the Fed strike down its proposal to disburse some of its remaining capital. The bank, as a result, categorically failed the test…..”
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