Goldman Sachs disputes Fed’s stress test findings

Goldman Sachs has filed an appeal with the US Federal Reserve over the results of the regulator’s recent “stress test,” which requires the bank to hold more capital, according to the Financial Times.

The Federal Reserve’s annual “stress test” showed that major US banks have enough capital to endure severe economic and market turmoil but faced higher hypothetical losses this year due to riskier portfolios.

Goldman Sachs recorded a 25.4 per cent loss on its credit card loan balances, higher than the overall average loss of 17.6 per cent for tested banks. The bank also saw a significant increase in its stress capital buffer (SCB) by 94 basis points.

Goldman plans to discuss with regulators to understand the reasons behind the SCB increase. CEO David Solomon stated last month that the increase does not reflect the bank’s strategic progress in reducing stress loss intensity.

Attribution: Reuters.