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FBN’s Liz MacDonald on the four banks that failed the Federal Reserve’s stress tests and those that are raising their dividends.
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We Begin this hour with breaking news the Federal Reserve releasing the results of its latest round of stress tests on nineteen large banks.
For all the news coming out this hour we -- -- -- When she's not newsroom she's right beside me.
Let's let's newsroom you're breaking as saying here's the deal.
We -- that Federal Reserve moved a day early to release the stress test results Jerry.
Because of new says breaking out of the banks themselves in fact we've on the phone all day with the banks and we've been breaking the story since yesterday and who was going to pass and -- -- going to fail.
And so here's the deal for investors and your viewers you don't want to watch this the bank's second issue dividends now or can do stock -- so that's the name of the game.
With the Federal Reserve did Jerry was -- basically stress test of the bank says they've been doing since 2009.
For some of the worst case scenarios of European Bank failure -- on top of you know an 8% downturn gross domestic product.
On top of you know unemployment spiking to 13% has hit and -- hang out and home prices up plunging further -- twenty.
-- so that that considered.
It yet -- usual and this is something that is a high hurdle for banks are not.
Is an important question because even deeper -- of the bank analysts are saying if that's scenarios that existed today Jerry.
No we wouldn't be having our money -- mattresses is depression and her kind of bond death scenarios and none of the banks would hardly be standing.
You know not number they would be happy and in trouble so the banks have failed then they in other words that did not pass is very stringent test stress test scenarios.
Our Citigroup sun trust -- life.
-- coming out with a statement that its capital bumpers are improving ally financial is not publicly traded it also.
-- to stress test OK so we've got big names there and of course our viewers wondering okay let's say.
May I -- probably in invested in Citigroup I also might be a customers Citigroup how important to that to me is this that they failed this big tech it's not an issue.
-- customer because the government is backing up your deposits.
It's an issue for you if you're Citigroup investor decides prince Al Waleed is because -- of the big investors want Citigroup to increase its dividend.
For a bank under the stress tests to increase the dividends they had asked the Federal Reserve for permission they also have the best for for permission.
To do stock buyback so we know that -- And here's the here's -- here the companies that are going to be.
Issuing dividends American Express Wells Fargo rather increasing them.
Wells Fargo US Bancorp JPMorgan Chase -- -- KeyCorp.
And also doing stock buybacks are gonna see JPMorgan Chase beating keep doing this as well -- -- -- and we've been breaking news since yesterday on this.
The company's up -- the flying colors and next.
Bank of New York Mellon.
And State Street.
You know it's interesting to hear about these companies that are increasing dividends this is all seems good news and of course -- sector was on fire today.
A lot of these stocks trading higher Howard the companies that -- the banks that failed how are they doing in after hours trading.
Well you know some of them worse under big pressure big time severe pressure those being suntrust and Citigroup for example -- you know what's so is interesting to Jerry got to -- yourself.
Candidate for and we were watching to his Bank of New York.
Basically.
Bank of America Bank of America rather saying.
We're not gonna issued dividend increase just yet remember Brian -- -- embarrassed about that last year.
On the suggestion last year -- hammered and got shot down by the Federal Reserve and so here's the deal and this is key for your investor viewers.
A lot of these banks for banks were calculating have about 370 billion bucks instill in second lien.
And home equity loan exposures and the like.
And those are those are assets that are very much -- stringing up.
At the top four banks including Bank of America and Citigroup and course -- Bank of America has been opposed to bank of all of this because of those countrywide.
Well as rotten mortgages still sitting on its books are right Melissa at Mac -- thanks for bringing that to as you've been following that all day all week relay.
Thanks for bringing -- -- is we really.
