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Top US banks withstand annual ritual of Federal Reserve ‘stress tests’

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Top US banks withstand annual ritual of Federal Reserve ‘stress tests’

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All 31 of the largest US banks passed the Federal Reserve’s yearly so-called stress tests, satisfying regulators that they could withstand a theoretical scenario in which unemployment rose to 10 per cent during a severe recession.

The Fed on Wednesday said that under its baseline scenario banks including JPMorgan Chase, Goldman Sachs and Bank of America would lose nearly $685bn and suffer their biggest hit to capital in six years, but would still meet regulatory minimum standards.

The scenario involved a 40 per cent decline in commercial real estate prices, a substantial rise in office vacancies and a 36 per cent fall in house prices.

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“This year’s stress test shows that large banks have sufficient capital to withstand a highly stressful scenario and meet their minimum capital ratios,” said Michael Barr, the Fed’s vice-chair for supervision.

“The goal of our test is to help to ensure that banks have enough capital to absorb losses in a highly stressful scenario,” he added.

The tests are used to calculate the minimum amount of capital, which is used to absorb losses, that banks must hold relative to their assets.

The banks, which often use the results of the test to update investors on potential shareholder payouts, will on Friday afternoon provide an update on what they expect their new capital requirement to be.

Barclays research analyst Jason Goldberg estimated that several large banks, including Goldman and BofA, are set to see their capital requirements rise by more than analysts had anticipated, potentially leaving less capital for potential dividends and buybacks.

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Goldman shares were down 1.7 per cent in after-hours trading, while those of BofA had slipped 0.3 per cent.

The annual exercise started after the 2008 financial crisis and was seen as a major factor in rebuilding confidence in the banking sector. In recent years, the nation’s largest banks have generally passed the tests, usually by a wide margin, raising questions about their usefulness and purpose.

Matthew Bisanz, a partner in the financial services practice at law firm Mayer Brown, said the tests’ reliance on capital buffers “focuses people on the wrong things”.

“Last March [2023], we saw three banks obliterated in one month,” he said, referring to the failures of Silicon Valley Bank, First Republic Bank and Signature Bank. “Yet all 31 of these banks survive a stress event that lasts nine quarters. This reinforces how unrealistic the stress test is.”

The results come during a renewed focus around capital levels at large US banks, with regulators weighing changes to its proposal to implement the so-called Basel III Endgame capital rules.

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The Fed’s initial proposal, which called for a significant increase in capital requirements, provoked an aggressive lobbying effort from large US banks. Fed chair Jay Powell has since said it would likely make material changes to the proposed new rules.

This year’s stress tests would push banks’ aggregate tier one capital ratio, their main cushion against losses, down by 2.8 percentage points, the biggest drop since 2018.

The Fed said the bigger losses were partly the result of an expectation of higher losses on credit card loans for the nation’s biggest banks, up nearly 20 per cent from a year ago. Banks’ corporate loan books also became riskier, as higher expenses and lower fees left lenders with less of a cushion to absorb a severe hit.

Another scenario, examining what would happen if five large hedge funds failed, showed the largest and most complex banks did have material exposure and were projected to lose between $13bn and $22bn in aggregate.

Additional reporting by Stephen Gandel in New York

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A dead woman’s key fob and two grisly crime scenes: How the Utah triple-murder suspect was tracked across state lines | CNN

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A dead woman’s key fob and two grisly crime scenes: How the Utah triple-murder suspect was tracked across state lines | CNN

As investigators raced to find the person responsible for three killings in rural Wayne County, Utah, they used automated license plate readers and a victim’s own vehicle key fob to track their suspect – a man police said has no connection to the victims or the region that is known for its awe-inspiring landscapes dotted with quiet, small towns.

It would take just hours to pin down the suspect in a search that spanned multiple states in the Four Corners region of the Southwest – ending early Thursday with the arrest of 22-year-old Iowa resident Ivan Miller, who is charged with three counts of first-degree, aggravated murder, officials said.

Miller was taken into custody in Colorado, officials said –– more than 350 miles from where the bodies of three women were found at two locations in Utah.

Miller’s first court appearance is scheduled for Friday afternoon in Archuleta County, Colorado. He will be represented by a public defender, court records show.

The victims were identified as Margaret Oldroyd, 86; Linda Dewey, 65; and Natalie Graves, 34, Utah’s Department of Public Safety said.

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Dewey and Graves, an aunt and niece who’d gone for a hike together, were found dead near a trailhead just outside the town of Torrey, Utah’s DPS said. The women’s bodies were found by their husbands who grew concerned when the pair didn’t return from their hike, Utah Highway Patrol spokesperson Lt. Cameron Roden said at a news conference Thursday.

Investigators found Oldroyd’s vehicle at the trailhead and deputies went to her home in nearby Lyman, where they discovered her body, Roden said.

After his arrest, Miller told investigators he spent a night in Oldroyd’s back shed and snuck into her house while she was out, according to an indictment filed in court Thursday. Miller “waited for her behind a door and shot her in the back of the head … while she was sitting down to watch television,” the indictment said.

Miller made efforts to clean up the scene before dragging the 86-year-old’s body to a cellar under the shed, where she was later found, the indictment read. He then stole her Buick Regal and traveled to the trailhead, investigators said. Miller told investigators “he did not like the car and wanted to find a different vehicle,” the indictment said.

At the trailhead, Miller said he saw Dewey and Graves get out of a white Subaru and shot them both, according to the indictment. Miller told investigators he stabbed one of the women in the chest multiple times because she was still moving, the document said.

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He then admitted dragging their bodies into a ditch, where the two were discovered by their husbands, the indictment said.

Officials said Miller ditched Oldroyd’s car at the trail and drove away in the white Subaru. Miller also admitted stealing the women’s credit cards and using one to pay for gas, according to documents.

Investigators used a network of license plate scanners to track the Subaru “through southern Utah into northern Arizona and eventually into Colorado,” Roden said.

“Colorado law enforcement located the vehicle abandoned in Pagosa Springs, Colorado, and after a brief search, took the individual into custody without incident,” Utah DPS said Thursday.

One of the husbands was also able to track the car’s location using an app that monitored the vehicle’s key fob, investigators said. Just after 9 p.m. Wednesday, the key fob appeared to be in Farmington, New Mexico — about two hours southwest of where Miller would later be taken into custody, according to the indictment.

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Miller had a handgun and a large knife in his possession at the time of his arrest, according to police in Pagosa Springs.

Miller told investigators he killed the women because he needed money, according to the indictment. “Miller confessed that it ‘had to be done’ but he did not like to do it,” the document reads.

Miller, who lived in Blakesburg, Iowa, set out on a cross-country road trip about two and a half weeks ago, his brother, who spoke with The New York Times on condition of anonymity, said.

Miller’s brother said the two stayed in contact during the trip, and Miller mentioned crashing his truck after hitting an elk, according to the Times.

The brother was concerned about how Miller was traveling around after that and offered to bring him back to Iowa, which he declined, the Times reported.

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After his arrest, Miller told officials that he had been staying at a hotel in the area for a few days after he hit an elk with his truck, which he then sold to a tow truck company, according to the indictment.

On Thursday, shaken residents across Wayne County placed pink ribbons around trees and fences in their communities as they remembered the three women who were killed in apparently random attacks carried out by a stranger.

“We wanted to honor our friend and neighbor,” Mary Sorenson, who put up ribbons around Lyman, told CNN affiliate KSL.

The Wayne County School District announced it would be closed for the rest of the week and would “have counselors in place to support students when we are back in session next week.”

In a statement Thursday, Torrey Mayor Mickey Wright described the multiple homicides as a “heartbreaking moment for our small, close‑knit community.”

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“Our community is strong. In the coming days, we will support one another, check on our neighbors, and ensure that those affected by this tragedy are not alone,” Wright said. “We stand together today — in grief, in compassion, and in solidarity.”

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Iran’s fight for survival / The widening war / Trump’s nebulous goals : Sources & Methods

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Iran’s fight for survival / The widening war / Trump’s nebulous goals : Sources & Methods
The U.S.-Israeli war with Iran is spilling out across the region. What are the goals? And how does it end?Host Mary Louise Kelly talks with International Correspondent Aya Batrawy, based in Dubai, and Pentagon correspondent Tom Bowman, about the U.S.-Israeli war with Iran. Six days of war have turned the middle east upside down, and it’s still not clear how the U.S. will determine when its objectives have been accomplished.Recommended Iran reading:Blackwave by Kim GhattasAll the Shah’s Men by Stephen KinzerPrisoner by Jason RezaianPersian Mirrors by Elaine SciolinoListener spy novel recommendation: Pariah by Dan FespermanEmail the show at sourcesandmethods@npr.orgNPR+ supporters hear every episode without sponsor messages and unlock access to our complete archive. Sign up at plus.npr.org.
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Map: 4.9-Magnitude Earthquake Shakes Louisiana

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Map: 4.9-Magnitude Earthquake Shakes Louisiana

Note: Map shows the area with a shake intensity of 4 or greater, which U.S.G.S. defines as “light,” though the earthquake may be felt outside the areas shown.  All times on the map are Central time. The New York Times

A light, 4.9-magnitude earthquake struck in Louisiana on Thursday, according to the United States Geological Survey.

The temblor happened at 5:30 a.m. Central time about 6 miles west of Edgefield, La., data from the agency shows.

U.S.G.S. data earlier reported that the magnitude was 4.4.

As seismologists review available data, they may revise the earthquake’s reported magnitude. Additional information collected about the earthquake may also prompt U.S.G.S. scientists to update the shake-severity map.

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Source: United States Geological Survey | Notes: Shaking categories are based on the Modified Mercalli Intensity scale. When aftershock data is available, the corresponding maps and charts include earthquakes within 100 miles and seven days of the initial quake. All times above are Central time. Shake data is as of Thursday, March 5 at 8:40 a.m. Eastern. Aftershocks data is as of Thursday, March 5 at 10:46 a.m. Eastern.

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