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Fed to review stress test procedures after correction

By Douwe Miedema WASHINGTON (Reuters) - The Federal Reserve on Saturday said it was reviewing the procedures of a closely watched exam banks must pass each year to prove their robustness after it had to correct the results. The U.S. central bank, which regards these so-called stress tests as an increasingly important tool in safeguarding the health of the financial industry after the crisis, could tweak its procedures as a result, a spokeswoman said.

German banks oppose including legal costs in stress tests: banking group

FRANKFURT (Reuters) - German banks would not favor including potential legal costs in upcoming stress tests on European lenders, the head of a German banking group said, after the U.S. Federal Reserve pointed out those risks in its health check on lenders in the United States. The head of the association of German banks (BdB), Michael Kemmer, said on Thursday it would be too complex to address such issues in the tests, which will check how a selected group of European banks will hold up under certain stress scenarios.

Stress tests no guarantee of banks' survival

Just because a European bank passes the upcoming stress tests by European regulators does not mean it has the necessary mettle to continue to survive, the German banking federation said Monday. "There will also be banks that pass the test, but still don't have a future. The test result is no guarantee that banks can continue to survive successfully," the head of the BdB federation, Juergen Fitschen, told the German news agency DPA in an interview.

17 of 18 US banks pass stress tests

All but one of 18 top US banks passed tough stress tests aimed at seeing if the financial industry could weather a new deep crisis, the Federal Reserve announced Thursday. Government-controlled Ally, the rescued former finance arm of General Motors, was the only bank to fail the test of capital strength. Seventeen of the banks tested showed their capital levels would hold up above a five percent minimum threshold if the economy was again rocked with the kind of crisis that sent the US financial system into turmoil in 2008.
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