Wednesday, March 14, 2012
All but four of the 19 major U.S. banks are strong enough to survive another serious recession, according to the Federal Reserve.
J.P. Morgan, Wells Fargo and other large bank holding companies that passed the Fed’s so-called stress tests announced that they would return capital to shareholders, igniting a late-day rally on Wall Street. The Dow Jones industrial average rose 218 points and closed at its highest level since the end of 2007.
“It’s clearly good news — the U.S. banking system can now withstand a quite severe recession without falling over,” said Douglas Elliott, a fellow at the Brookings Institution, a nonpartisan policy think tank.
One notable exception was Citigroup, the nation’s third-largest bank. It was among the companies the Fed said lacked enough capital to withstand another severe economic and financial crisis. Its stock price fell 4 percent in after-hours trading. The Fed announced the results after markets had closed.
Read more at The Register-Guard.