Big Banks Clear First Phase of Federal Reserve Stress Tests<br />The stress tests, which were introduced early in the Obama administration and are required by the 2010 Dodd-Frank financial overhaul, are intended to ensure<br />that banks have enough capital to cover severe losses like those sustained during the mortgage crisis and to avoid another taxpayer-funded bailout.<br />Thursday’s results are very likely a good harbinger for next week’s even more consequential test, when<br />Fed officials will decide whether to approve the banks’ plans to pay dividends and repurchase shares.<br />The nation’s largest banks breezed through the first phase of their annual tests on Thursday, demonstrating<br />that they have enough capital to withstand the type of financial shock that nearly ruined the industry and the world economy in 2008.<br />Next week, the Fed will decide whether to approve plans to pay dividends and repurchase shares.<br />The banking system, according to the test results, has an even larger capital cushion than it did going into last year’s exam.<br />By MICHAEL CORKERYJUNE 22, 2017<br />Once universally dreaded by banks, the Federal Reserve’s annual stress tests are becoming less stressful.<br />Wall Street analysts expect that those payouts will increase this year — a big plum<br />for investors who have gone through nearly a decade of lagging stock prices.
