What's the current state of those capital requirements in US banks?
Is this the latest requirement? https://www.federalreserve.gov/newsevents/pressreleases/bcre...
(4.5%)
And how do banks actually measure up to this minimum?
Is this the latest requirement? https://www.federalreserve.gov/newsevents/pressreleases/bcre...
(4.5%)
And how do banks actually measure up to this minimum?
https://www.federalreserve.gov/publications/large-bank-capit...
So JP Morgan is 11.2%; Citigroup is 10.5%; for example.
(This is in contrast to the ECB stress tests during the Euro crisis, where repeatedly banks that had passed a stress test ended up needing bailouts or falling over.)
Basically stress tests simulate large drops in asset values, but during COVID the trading desks made bucketloads of money when volatility was high. The financial sector is pretty resilient these days, the risky stuff mostly moved off bank balance sheets into private funds not subject to the same regulatory requirements.