Stress tests

The advanced approach has limited value, eliminating it has no downside risks and regulators have better tools at their disposal.

Six biggest banks set to return nearly $100 billion to shareholders; Capital One’s plan approved by Federal Reserve, but with conditions.

The largest banks announced plans to distribute capital back to shareholders after the Fed gave passing grades to everyone following this year’s CCAR stress tests.

All 34 banks passed the Fed’s CCAR stress test, fueling industry calls to dial back the intensity of the stress tests. But many of the changes have already been internalized by banks.

The research firm is set to release a report Tuesday that it says previews the results of the Fed’s 2017 Comprehensive Capital Analysis and Review stress test results for 16 superregional banks.

Though regulatory rigor has improved post-crisis, it would be hubris for the Fed to believe it has found a magic formula that will predict with accuracy how any of the big banks will truly perform in the next downturn.

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All 34 big banks demonstrate they could survive a severe recession; credit cards emerge as the biggest vulnerability, with a projected $100 billion in losses.

The test showed that banks face potentially heavy losses in certain loan categories under economic stress, particularly in the area of credit cards, counterparty losses and commercial and industrial lending.

Regional banks with big commercial property portfolios may have a tough time passing stress tests; Fed governor, comptroller of the currency discuss easing bank regulation.