Big banks don’t appear to be in danger of bankruptcy, according to the Federal Reserve’s latest stress test. But that doesn’t mean shareholders have nothing to worry about.
For investors, what is often the most important thing about stress testing is not the big picture, but the small details. It seems that small changes in a bank’s capital requirements can have a big impact on their ability to pay back and push their return on equity higher. And this test shows that for some of the biggest banks, there are no easy answers right now.
