Brown Statement on Wall Street Stress Test
WASHINGTON, D.C. — Today, Sen. Sherrod Brown (D-OH), Chair of the Senate Committee on Banking, Housing, and Urban Affairs, issued the following statement after the Federal Reserve released its Dodd Frank Act Stress Test (DFAST) results. Stress tests are assessments performed by the Federal Reserve to ensure banks are strong enough to withstand a downturn in the economy without setting off another financial crisis.
“It is past time for the Fed to implement rigorous stress tests and strong capital requirements,” said Brown. “Wall Street bank CEOs have raised the alarm bells that an economic hurricane is coming, but the reality is that the largest banks aren’t doing what they need to do to protect the economy from the next crisis. Instead of building up capital to withstand losses or investing in the real economy and workers, they’re planning to spend $80 billion in stock buybacks and dividends. Taxpayers shouldn’t be left holding the bag for Wall Street CEOs who put profits over working families.
Under the previous Administration, the Fed weakened the tests by reducing the amount of capital required to pass, handing out more information to help banks prepare in advance, and exempting banks from the most stringent components. Senator Brown has long called on the Fed to strengthen stress tests.
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