Fed Revises Banks’ Stress Tests Results; Only Minor Changes In Data

The Federal Reserve made minor changes to the stress test data of 30 banks that were released last Thursday.

According to the Fed, the changes to the banks’ minimum, post-stress Tier I common capital ratios, in a severely adverse scenario, were necessitated due to “inconsistencies in the treatment of the fourth quarter 2013 actual capital actions and assumptions about preferred and employee compensation-related issuance over the course of the planning horizon.”

Of the 30 firms, the correction was immaterial for 26 cases, but led to a 0.5% decline in one bank (American Express Company (NYSE:AXP)), a 0.2% decrease in another (HSBC North America Holdings) and a 0.3% increase at two firms (M&T Bank Corporation (NYSE:MTB) and Northern Trust Corporation (NASDAQ:NTRS)).

The projected...