The Fed's Bank Stress Test Results Are In. Here's What They Mean for Dividends and Buybacks.
It's a good time to invest in bank stocks.
Overview
The Federal Reserve conducts an annual stress test of the 32 largest U.S. banks to assess how well they would withstand a severe recession or economic shock. These tests were borne out of the global financial crisis of 2008 as legislators took steps to shore up the banking system to avoid a similar meltdown.
This year, the large banks all passed the stress tests by varying degrees. According to the Fed, the banks proved they had sufficient capital to absorb nearly $708 billion in losses while continuing to lend to households and businesses under these hypothetical, stressful conditions.
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Originally published at www.fool.com.
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