Ally Financial Only Big Bank To Fail Fed’s Test
By Dan Bobkoff
The Federal Reserve has released the results of another round of “stress tests” on the nation’s biggest banks. Most did well, with 17 out of 18 passing. But some banks were better prepared than others to withstand a sharp downturn. STEVE INSKEEP, HOST: The country’s biggest banks are in much better shape than before the financial crisis, at least according to the Federal Reserve’s third round of so-called stress tests. NPR’s Dan Bobkoff reports. DAN BOBKOFF, BYLINE: The tests simulate a nightmare scenario: How would the banks fare if unemployment topped 12 percent, stock prices were cut in half and housing values fell 20 percent? We all know what happened five years ago when a crisis was more than hypothetical. During the stress tests’ scenario, only one of the 18 largest banks would not have been able to survive on its own. That’s based on current capital and past dividends. The outlier was Ally Financial. Karen Petrou is with Federal Financial Analytics. KAREN PETROU: The biggest banks are a lot stronger than they were before the crisis, and they’re getting stronger still.
For the full transcript click here: