Goldman Sachs, Morgan Stanley must keep capital return plans unchanged after Fed stress test blunder; DB Gets panned

The New York-based investment banks were ensnared by the administration's tax cut, which resulted in a one-time drop to the capital ratios of the firms, according to the Federal Reserve. Specifically, when accounting for the dividends and buybacks the firms originally wanted to pay, the banks fell beneath minimum required ratios for capital levels called tier 1 leverage and supplementary leverage under a scenario of financial distress.

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But the Fed saved its worst grade for the U.S. division of Deutsche Bank, which the Fed has previously deemed a troubled institution. The Fed said it objected to the capital plan of DB USA over concerns of the firm's management of data and its capital planning and weaknesses in forecasting revenues and losses. U.S. shares of Deutsche Bank fell about 1 percent in extended trading.