The Federal Reserve has issued guidance that will require the 19 banks that underwent stress tests during the height of the 2008 and ongoing financial crisis, to undergo another review of their capital and their ability to absorb losses under an "adverse" economic scenario.
|The "Stress Test" 19||Total *(Billions)|
|1. JPMorgan Chase||2,175|
|3. Bank of America (1)||1,822|
|4. Wells Fargo||1,310|
|5. Goldman Sachs||885|
|6. Morgan Stanley||659|
|8. PNC Financial Services||291|
|9. U.S. Bancorp||267|
|10. Bank of New York Mellon||238|
|13. State Street||177|
|14. Capital One Financial Corp.||166|
|16. Regions Financial Corp.||146|
|17. American Express||126|
|18. Fifth Third Bancorp||120|
*2008 Q4 data
According to the guidance, all 19 banks must submit capital plans by early next year showing their ability to absorb losses under a set of conditions to be determined by The Fed, America's central bank. The new request is part of the Fed’s effort to step up supervision at the nation’s largest financial firms.
A significant number of banks have failed in the last few years compared to life insurers (which issue structured settlement annuities) which already have signifcant reserving requirments and asset/liability matching standards that must be certified annually to each state insurance department.