Citigroup Failed to Pass the Stress Tests

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http://watchingamerica.com/News/235952/citigroup-failed-to-pass-the-stress-tests/

Citigroup Failed to Pass the Stress Tests
Le Monde, France
By Stéphane Lauer
Translated By Michael Krimian
27 March 2014
Edited by Gillian Palmer

That is what one calls a slap. Amid the series of stress tests the Federal Reserve runs on the big American banks, on March 26, five of them have been judged too feeble to allow themselves to increase their dividends and proceed to buy their own shares.

Citigroup, the third largest bank in terms of assets, is among the bad bunch, along with three big foreign bank branches — the British HSBC and RBS, and the Spanish Santander. Zions Bancorporation, a small bank in Utah, is also part of the blacklist.

Severe Scenarios

About 30 establishments have been subjected by the Fed to a series of financial crisis scenarios to test their soundness. These measures follow the Dodd-Frank law on Wall Street reform. This legislation was implemented after the Lehman Brothers bankruptcy in September 2008, in order to avoid using public funds once again to keep the financial sphere afloat.

Only the most important banks, with more than $50 billion of assets in the United States, are concerned, that is to say, the entities considered "too big to fail," and whose demise endangers the financial system.