The fact so many banks passed the Federal Reserve's recent round of stress tests is "confirmation that the industry is really strong," PNC Financial Services Group CEO James Rohr told CNBC Wednesday.
"The real issue for all of us is the Fed put us through what has to be considered very extreme stress. I mean, [criteria of] an unemploymentrate of 13 percent, 30 percent higher than we’ve experienced in the depth of the recession that we’ve been in recently; stocks down 50 percent, housing prices down 21 percent. That's clearly a severe stress test," said Rohr.
He said it was "a positive thing" so many banks came through with 5 percent ratios "and the market reflected that yesterday."
The Fed saidlate Tuesday that 15 of the 19 largest U.S. banks — including Pittsburgh-based PNC — would have satisfactory capital buffers of 5 percent, even if they suffered a financial shock. Citigroup, SunTrust Banks, Ally Financialand MetLife were the four that failed.
The Fed announced the stress tests results earlier than planned after JPMorgan Chasesaid Tuesday it would be raising its dividend and buying back $15 billion in stock, a signal it had passed the stress test, triggering a market rally and a flow of similar announcements from other banks.
The Fed later said the timing of JPMorgan's news was due to a " miscommunication ."Page 1 of 2 | Next Page