The Fed's Bank Stress Test Results Are In. Here's What They Mean for Dividends and Buybacks.
Key takeaways
- NVDA The Federal Reserve conducts an annual stress test of the 32 largest U.S. banks to assess how well they would withstand a severe recession or economic shock.
- This year, the large banks all passed the stress tests by varying degrees.
- In 2009, a "Double Down" signal flashed for a little-known chipmaker called Nvidia.
NVDA The Federal Reserve conducts an annual stress test of the 32 largest U.S. banks to assess how well they would withstand a severe recession or economic shock. These tests were borne out of the global financial crisis of 2008 as legislators took steps to shore up the banking system to avoid a similar meltdown.
This year, the large banks all passed the stress tests by varying degrees. According to the Fed, the banks proved they had sufficient capital to absorb nearly $708 billion in losses while continuing to lend to households and businesses under these hypothetical, stressful conditions.
Missed Nvidia in 2009? This Rare Signal Is Flashing Again. In 2009, a "Double Down" signal flashed for a little-known chipmaker called Nvidia. For the first time in years, that same "Total Conviction" signal is flashing for a company 1/100th the size of Nvidia. Continue »