The US Federal Reserve has rejected the capital plans of US branches of Germany’s Deutsche Bank and Spain’s Banco Santander in a test designed to gauge whether America’s biggest banks are prepared to withstand a hypothetical financial crisis.
The 31 institutions that were tested this year hold $14 trillion in assets as of the fourth quarter of 2014, or about 80 percent of domestic bank holdings in the US, the US Federal Reserve said Wednesday. Both the banks which failed have passed Europe’s financial institution stress tests.
The two banks were the only foreign banks out of the 31 major banks audited to fail the second part of the stress tests. America’s largest bank, Bank of America, only got a conditional pass, and will need to submit a new capital plan by September. The Fed said that BofA had “deficiencies” in how it would react to a severe economic downturn.
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Lucas 2012 Infos 