2013-08-20 — nytimes.com
on Monday, the Federal Reserve described some significant shortcomings in the banks' responses to the so-called stress tests. Despite the severity of the recent housing crisis, the Fed said some banks were not taking into account the possibility of falling house prices when valuing certain mortgage-related assets for the tests. In other cases, banks assumed they would be strong enough to take business away from competitors in times of stress.
In March, the Fed announced that two out of 18 banks had effectively failed the latest tests. One was BB&T, a regional bank based in Winston-Salem, N.C. The other was Ally Financial, a consumer lender that has struggled to right itself since the financial crisis and still has not fully repaid its bailout money to the government. Also in March, JPMorgan Chase and Goldman Sachs passed the latest tests, but the Fed said their responses contained weaknesses, and the banks were required to resubmit their plans by the end of September.
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