The Financial Times reported on Sunday, citing people familiar with the case, that Goldman Sachs has filed an appeal with the U.S. Federal Reserve contesting its outcome in the regulator’s most recent “stress test,” which is expected to require the bank to keep a larger amount of capital.
The largest US banks would have adequate capital to survive significant market and economic volatility, according to the Federal Reserve’s annual “stress test” exercise, which was conducted last month. However, because of their riskier portfolios, these companies faced greater potential losses this year.
Overall, the tested banks had losses of 17.6% on their credit card debt, with Goldman Sachs suffering the largest loss at 25.4%.
At 94 basis points, Goldman had one of the largest increases in stress capital buffers (SCB).
The size of a bank’s stress capital buffer (SCB), an additional capital cushion that the Fed mandates banks maintain to weather a hypothetical economic downturn, is determined by how well the firm performs on the stress tests.
In order to learn more about the reasons for the SCB hike, Goldman stated it will speak with its regulator.
CEO David Solomon stated in a statement last month that “this increase does not seem to reflect the strategic evolution of our business and the continuous progress we’ve made to reduce our stress loss intensity.”
Regarding the article, the Federal Reserve refrained from commenting, and Goldman Sachs did not promptly reply to inquiries from