The Federal Reserve’s annual stress tests found 29 of the 30 largest U.S. banks could withstand a deep recession and still pay dividends, fuelling speculation about which firms will win approval next week to raise payouts.
Bloomberg reports that Zions Bancorporation is the only lender that came in below one of the Fed’s main capital thresholds in results released Thursday by the central bank that simulated a severe economic slump. All 30 firms, including Zions, topped the minimum in a separate scenario of rising interest rates. The Fed said capital levels have improved since the 2008 financial crisis and the largest banks are better positioned to lend and meet their financial commitments.
'The average person who relies on the banking system should be happy', said Dan Ryan, head of PricewaterhouseCoopers’ global financial regulation practice, calling the financial system safe. 'Next week will tell us whether banks and bank shareholders will be happy'.
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