Federal Reserve Bank announced a new round of stress tests

Requirements of the Federal Reserve issued a circular in May 2009 to accept the pressure testing of the 19 major banks to launch a new round of testing, new test designed to measure the absorption loss of the next 2 years banking capabilities and how to meet the Basel III requirements.

Integrated Media November 18 report, said a notice on the Federal Reserve, in May 2009 to accept the pressure testing of the 19 banks will be required to conduct a new round of stress testing.

Formally, only plans to increase the dividend or share buyback is only necessary to accept the new bank stress tests. But the Fed made it clear that all the 19 banks should be in the January 7, 2011 to submit the "consolidated capital plan."

Federal Reserve, wrote in the notice: "The Fed Regulatory Capital Assessment Program (SCAP) bank holding company should be January 7, 2011 to submit the capital program, regardless of whether they intend to distribution of capital."

The Fed said the new stress tests designed to measure:

(1) the company the next 2 years in the absorption of some loss of capacity scenarios. These scenarios include the adverse macroeconomic scenario Federal Reserve and designated for specific portfolio company's business model and the negative scenarios.

(2) the proposed capital distribution and financial reform bill on the company's business model or capital adequacy ratio under the influence of the scenario, the company how to meet the capital requirements for Basel III?

(3) related to the company returned to the U.S. government investment plan. Bank holding company preferred stock or common shares is expected to return or replace the way of investment in the United States Government, after the repurchase of shares by way of higher dividends or increased capital expenditure.