- Goldman Sachs and JPMorgan granted ‘conditional’ approval
- They must resubmit capital plans by the end of Q3
- GS tier 1 common capital seen as low as 5.26%
- Must immediately address weakness, Fed says
- GS and JPM face rejection if weaknesses not fixed
On top of that, BB&T and Ally failed the stress tests. The other 14 banks were approved without conditions.
‘Conditional’ approval is the polite way of saying ‘we want to fail you but we’re scared of how markets would react’. I expect this will deal a blow to stocks tomorrow but I make no promises — stocks have shaken off worse news and rallied in the past few months.
