Cohen: Stress Tests Show U.S. Banks Well Capitalized

The video discusses the results of recent stress tests, highlighting the strong capitalization of US banks. It raises concerns about future developments, such as the G SIB surcharge and Basel IV, which may increase capital requirements. The discussion also touches on the potential risks of excessive capital and the lack of correlation between high capital levels and low losses. A comparison between US and European banks' capital positions is made, noting the divergence in their approaches.

What did the recent stress tests reveal about the US banking system?

• It is undercapitalized.

• It is moderately capitalized.

• It is poorly capitalized.

• It is well capitalized.

What is one of the future concerns regarding stress tests?

• Incorporating the G SIB surcharge.

• Increasing interest rates.

• Eliminating stress tests.

• Reducing capital requirements.

What is Basel IV attempting to standardize?

• Bank mergers.

• Loan approvals.

• Risk weightings.

• Interest rates.

Which bank had the lowest tier one capital ratio among US banks?

• Goldman Sachs

• Morgan Stanley

• Santander

• Deutsche Bank

What is a key difference between US and European banks according to the stress tests?

• US banks have lower capital ratios.

• European banks have higher capital ratios.

• European banks are more profitable.

• US banks have higher capital ratios.