Goldman Sachs (NYSE:GS) has filed an appeal with the US Federal Reserve challenging the regulator’s latest “stress test” that aims to force the bank to hold more capital, the Financial Times reported on Sunday, citing people familiar with the matter. material.
The Federal Reserve’s stress tests are designed to determine the amount of capital vast banks will need to raise to survive a financial shock.
The Federal Reserve’s annual stress test last month found that while large banks will suffer bigger losses than they did in 2023, they are well-positioned to weather a severe recession.
The 31 banks surveyed recorded losses of 17.6% of existing credit balances, while Goldman Sachs (GS) reported losses of 25.4%.
Last month, the Fed informed Goldman Sachs (GS) has lowered its stressed capital buffer to 6.4%, resulting in a standard Common Equity Tier 1 capital ratio requirement of 13.9%, effective October 1, 2024.
“This increase does not appear to reflect the strategic evolution of our business and the continued progress we have made to reduce the intensity of stress losses, as noted by the Federal Reserve over the past three tests,” Chief Executive David Solomon said in a statement. statement last month.
Solomon added that the bank will continue to work with the Fed to better understand its findings.
