City CEO Jane Fraser will speak at the Milken Institute Global Conference held in Beverly Hills, California on May 1, 2023.
Patrick T. Fallon | AFP | Getty Images
The bank’s stock rose Thursday after the Federal Reserve announced parameters for stress testing for the annual industry. This indicates that the hypothetical shock to the US economy is smaller than in previous years.
It’s still challenging with our unemployment rate jumping to 10% and home prices falling 33%, but the 2025 exam shows that there is less unemployment rate and lower inventory and real estate values than previous versions less, Barclays’ Jason Goldberg said Thursday in a memo. The title is “2025 Stress Test: A Easier Scenario than the past two years.”
The Fed will take steps to “start to reduce stress test results volatility and improve model transparency” in its 2025 exam, regulators announced Wednesday after normal trading closes It was stated in a statement.
Citigroup shares rose 2.9% in noon trading, while Goldman Sachs, Morgan Stanley and Bank of America each rose at least 1.5%. Large banks have more than small lenders, with the KBW Bank Index increasing by 1.2% compared to a 0.9% increase in S&P Regional Bank ETF.
The stress testing changes have strengthened incidents made by Wall Street analysts, which have said large U.S. banks will face a more friendly regulatory regime under the Trump administration. Since the aftermath of the 2008 financial crisis, the largest bank in the United States had to take an annual examination to test its ability to withstand a severe recession while continuing to lend to consumers and businesses.
For years, banks complained that annual stress tests were opaque and unfairly managed, and industry trade associations sued the Fed in December on the exam.
Banks are more challenging and predictable later this year, with more challenging and predictable testing, with fewer with the latest iteration of tests, both with more challenging and predictable, according to Bank of America analyst Ebrahim Poonawala I was able to hold the capital cushion.
“The 2025 stress testing scenario, broader than last year, will see banks relax their regulatory capital requirements given our expectations for a balanced, transparent and more predictable regulatory regime. It’s building our confidence that we should start,” Puonawarra wrote Thursday. Note.
Michael Bloom of CNBC contributed to this report.
