Financial institutions

Two foreign-owned banks — Santander and Deutsche Bank — failed the Fed's stress test. Two other foreign banks that failed last year, HSBC and RBS Citizens, passed this year.

Citigroup Chief Executive Michael Corbat will still have a job tomorrow (and probably several days after that). The bank's capital distribution plan was approved by the Federal Reserve on Wednesday, undoubtedly to the delight of shareholders who were surprised by last year's rejection.

JPMorgan Chase, Morgan Stanley and Goldman Sachs were each forced to resubmit their capital plans in order to pass the Fed's CCAR stress test, while Bank of America was publicly faulted for weaknesses in its capital planning process. While some saw that as a bad sign, others contended the banks appear more comfortable in pushing the limits of the stress testing process.

The Subsidy Reserve Act would bring into the open the financial benefits of being "too big to fail" — benefits the big banks claim to be nonexistent.

Industry groups are urging the Pentagon to soften its proposed expansion of a rate cap on loans sold to service members, but banks face opposition from dozens of advocacy groups that favor tougher restrictions.

A recap of the informed opinions (and the discussions they generated) on BankThink this week, including the downside of public banking and the vulnerabilities unaddressed by global regulators' bail-in plan for megabanks.

All 31 firms that took this year's Dodd-Frank Act Stress Test had enough capital to withstand the Fed's hypothetical severe economic scenario, but several of the largest banks were teetering on the edge of the leverage and risk-based capital requirements.

Some newcomers to mortgage servicing did not hedge because hedging would have increased costs. Had rates moved up, the strategy would have paid off handsomely. Instead, it worked against them.

The Financial Stability Board’s proposed capital and long-term debt requirements would only go part of the way toward ending the risk of government bailouts. If regulators really want to get rid of too big to fail, they need to deal with over-the-counter derivatives market.

The paper by a consultant with the Office of Financial Research said that projected losses in the 2013 and 2014 tests were "nearly perfectly correlated," suggesting that the tests have become "less informative."

Though stress tests are widely viewed as a successful and critical exercise, there are growing concerns that regulators — and the banks themselves — may have become too reliant on them, overshadowing other aspects of the supervisory process.

International remittances grew at a number of banks last year, according to new data, but anti-money-laundering rules may make the fee-based business too expensive to keep.

Embattled mortgage servicer Ocwen Financial faces up to $26 billion in damage claims by bondholders and a greater risk of being fired as a mortgage servicer on thousands of small, private-label trusts.

The Fed's annual dissection of each of the 31 largest U.S. banks is a painstaking and enormously complicated endeavor. This is an inside look at how it works.

Big banks are making critical risk management decisions with data that is old, incomplete or even inaccurate. This endangers the safety of the global financial system in more ways than one.

Prosper Marketplace, an online lender for consumer loans, has found a new source of referrals: community banks.

The Obama administration's proposed bank tax would apply to all liabilities of large financial institutions — including their deposits. It's bad policy to tax the funding that banks use to make loans to consumers and businesses.

One in three struggling homeowners who received a loan modification through the Home Affordable Modification Program ultimately redefaulted on those loan.Meanwhile, the program that was supposed to help some 4 million families avoid foreclosure has helped only a fraction of that amount, according to a report presented to Congress.

By prosecuting executives responsible for banks' misdeeds, the DOJ can curtail illegal activity and restore public trust in big banks — and in the law itself.