(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 check”, which is about to pressure the financial institution to carry a higher quantity of capital, the Monetary Instances reported on Sunday, citing folks accustomed to the matter.
The Federal Reserve’s annual “stress check” train confirmed final month that the largest U.S. banks would have sufficient capital to resist extreme financial and market turmoil however corporations confronted steeper hypothetical losses this yr as a result of riskier portfolios.
The examined banks general 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 greatest will increase in stress capital buffers (SCB) at 94 foundation factors.
How properly a financial institution performs on the stress exams dictates the dimensions 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 can have interaction with its regulator to raised perceive why its SCB jumped.
“This enhance doesn’t appear to replicate 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 a press release final month.
Goldman Sachs and the Federal Reserve didn’t instantly reply to requests from Reuters for touch upon the FT report.
