WASHINGTON — The nation's largest financial institutions will have more time to dispute the results of "stress tests" conducted by federal regulators, several people familiar with the situation said Tuesday.
Though regulators have not specified deadlines in official documents, it has been widely assumed that banks would lodge their complaints by Tuesday before the results are released to the public on May 4.
Now both of those deadlines are murky, according to sources. There is apparently no clear cut-off point for a bank to challenge the stress test results. Meanwhile, the results are still expected to be made public next week, but not necessarily on Monday.
Bank executives from the 19 largest domestic financial institutions filed into their regional Federal Reserve Banks on Friday to learn how they fared under the stress tests. Details from those meetings have started to leak out; The Wall Street Journal reported Tuesday that Bank of America Corp. and Citigroup Inc. were told they will need more capital.
Analysts have also focused on Fifth Third Bancorp of Cincinnati as another candidate to raise more capital.
The Federal Reserve Board has held off on publicly releasing the stress test results as banks sift through the regulators' determinations. Instead, the central bank released its methodology on Friday for conducting the stress test.
The Fed's release was light on numbers and other details but maintained that the financial institutions reviewed remain well capitalized at the moment. The whole point of the stress test, which was unveiled by the Treasury Department in February, is to plan ahead for more turmoil in the next two years and encourage banks to increase capital cushions to absorb bigger losses if economic conditions continue to deteriorate.