Fed revises stress test losses
The Federal Reserve bank said on Friday it had made mistakes in calculating bank losses in stress test results released this week.
But the Federal Reserve noted the revisions -- which affect Citigroup
In results first released on Tuesday, the Fed gave glowing marks to most of the large banks, passing 15 out of 19 tested, and underscoring the recovery of the financial sector.
But the central bank called out a few laggards, including Citigroup, forcing it and others to revise planned share buybacks and dividends.
In revised figures released on Friday, the Fed reduced Citi's losses on first lien mortgages from $9.3 billion to $8.9 billion under the stressed scenario. The change occurred after the Fed decided to remove foreign mortgages from that calculation.
Citi representatives were not immediately available for comment.
The other banks affected by the revisions are Ally Financial
Citigroup, Ally Financial, Metlife and Sun Trust
Overall, for the 19 banks, the Fed's revisions slightly decreased losses on first lien mortgages from $61.5 billion to $61.1 billion.
The calculations were based on estimated losses sustained by banks during a 27-month period in which unemployment hit 13 percent and housing prices drop by 21 percent.
The bank holding companies whose balance sheets weathered the hypothetical storm best were Bank of New York Mellon with a Tier 1 common capital ratio of 13.1 percent, State Street Corp with 12.5 percent and American Express with 10.8 percent.
(Reporting By Alexandra Alper; editing by Carol Bishopric and Ron Popeski)
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