Federal Reserve Board Chair Jerome Powell has presided over a broad deregulatory agenda that has made our financial system less resilient and driven rising wealth and income inequality.
The Federal Reserve has announced the results of its 2021 bank stress tests. Since then, these results have led a steady parade of the largest banks in the country to announce dramatic increases in dividends. The stress tests will also enable greater share buybacks and other capital distributions by banks. This will enrich senior executives and large shareholders, while putting financial stability at risk.
Letters to Regulators: AFR commented on Federal Reserve proposed changes to capital rules to implement new stress buffer requirements.
AFR commented on a Federal Reserve proposal that would integrate the capital requirements in its different capital regimes to institute new stress buffer requirements.
Stress tests are forecasts based on models. They stand or fall on the approach of regulators, whose assumptions can seriously underestimate bank losses. Before the 2008 financial crisis regulatory models also showed Wall Street was safe, but that turned out to be fantasy.