(Reuters) – Goldman Sachs has lodged an attraction with the U.S. Federal Reserve difficult its outcome within the regulator’s most up-to-date “stress take a look at”, which is ready to drive the financial institution to carry a better quantity of capital, the Monetary Occasions reported on Sunday, citing folks aware of the matter.
The Federal Reserve’s annual “stress take a look at” train confirmed final month that the most important U.S. banks would have sufficient capital to face up to extreme financial and market turmoil however companies confronted steeper hypothetical losses this 12 months resulting from riskier portfolios.
The examined banks total noticed losses of 17.6% to current mortgage balances on bank cards and amongst them Goldman Sachs recorded 25.4% in losses.
Goldman had one of many largest will increase in stress capital buffers (SCB) at 94 foundation factors.
How nicely a financial institution performs on the stress checks dictates the scale of its stress capital buffer (SCB) – an additional cushion of capital the Fed requires banks to carry to climate a hypothetical financial downturn.
Goldman mentioned it’s going to interact with its regulator to raised perceive why its SCB jumped.
“This enhance doesn’t appear to mirror the strategic evolution of our enterprise and the continual progress we have made to cut back our stress loss depth,” CEO David Solomon mentioned in an announcement final month.
Goldman Sachs and the Federal Reserve didn’t instantly reply to requests from Reuters for touch upon the FT report.
