Banks Watered Down Stress Tests

The stress-test results were generally considered good news—in part, perhaps, because the banks wanted it that way? “The Federal Reserve significantly scaled back the size of the capital hole facing some of the nation's biggest banks shortly before concluding its stress tests, following two weeks of intense bargaining,” reports The Wall Street Journal. Executives at Citigroup, Bank of America, and Wells Fargo were originally “furious with what they viewed as the Fed's exaggerated capital holes” and fought to reduce them. Bank of America’s was originally more than $50 billion (now scaled back to $34 billion). Citigroup’s was revised downward from $35 billion to just $5 billion. “At least half of the banks pushed back,” the Journal writes.