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Bank Stocks Poised For Stress Test Boost as Fed Preps Second Report Card

Martin Baccardax

The Federal Reserve is set to publish the second stage of its bank stress tests results Thursday in a report that will signal whether the country's biggest lenders will be able to boost dividends, increase share buybacks or accelerate business investment. The tests, devised by the Fed in the wake of the global financial crisis, are designed to both asses the ability of the country's 35 biggest banks to withstand a sharp economic slowdown and to gauge their broader earnings potential by approving or deny capital deployment and business plans submitted by management. Will a top European investment bank botch the first public stress test of its entire U.S. business?," wrote Hong Kong-based Hongta Securities.