Fed stress tests: foreign banks lag US on capital estimates

- By Alessandro Aimone
- @aimoneale
- 09 Aug 2018

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The US intermediate holding companies (IHCs) of foreign banks have been consistently worse at modelling their performance under the Federal Reserve’s stress tests than US banks over the past three years.

On average, IHCs missed the Fed’s estimates of the amount their Common Equity Tier 1 (CET1) capital ratios would fall in the 2018 test cycle by 213 basis points, compared with 109bp by US lenders. In 2017, IHCs misjudged the Fed’s estimates by an average of 129bp, versus an average of 99bp for

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