Goldman, Morgan Stanley Do Better in Fed Stress Tests After 2018’s Stumble
- All 18 banks show ability to withstand a hypothetical shock
- Firms can win approval for capital payouts in exam next week
Photographer: Eric Thayer/Bloomberg
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Goldman Sachs Group Inc. and Morgan Stanley improved on last year’s poor results in the first round of the latest Federal Reserve stress tests, a sign they may have more flexibility to boost payouts to shareholders.
In figures posted Friday by the Fed, the pair didn’t come as close to breaching regulatory minimums as they did last year, offering hope they will escape limits on dividends and stock buybacks imposed back then. All 18 banks in the exam demonstrated an ability to withstand a hypothetical financial shock. The second and final round next week determines whether firms win approval to boost capital payouts.