US Fed sets high bank capital levels after stress tests, eases Goldman’s level By Reuters

By Pete Schroeder

WASHINGTON (Reuters) – The U.S. Federal Reserve said on Wednesday it had set the latest capital cushions for big banks following annual stress tests in June, but agreed to reduce the burden on Goldman Sachs.

The new levels, effective Oct. 1, largely mirror those the Fed first identified as part of its annual health check of big banks.

But the central bank added in its statement that it had reduced the level of additional capital required from Goldman Sachs after the firm asked the central bank to reconsider its finding. The bank must now hold a “stress capital buffer” of 6.2%, down from the 6.4% suggested in the test.

The Fed said it agreed to the change after receiving additional information from the bank, adding that it was appropriate to adjust the treatment of some historical non-recurring expenses in the examination.

In a statement when the results were released, Goldman CEO David Solomon said he plans to discuss the finding with the Fed.

“We appreciate the Federal Reserve’s willingness to reconsider this matter,” Goldman Sachs chief financial officer Denis Coleman said after the results were released.

“We will continue to engage with our regulator to better understand their determinations and advocate for a more transparent process.”

The Fed added that it would explore changing the way banks report data to refine its collection, as well as possible improvements to its internal stress-testing models.