What Are the Question Marks in Fed's Stress Tests?

The video discusses the credibility of stress tests in the U.S. banking sector, highlighting the ongoing capital build-up by banks and the tougher tests this year. It addresses financial stability concerns related to energy loans and the oil sector, and explores the negotiation between banks and the Fed regarding capital deployment, dividends, and stock buybacks. The discussion also covers the equity and debt perspectives, with a focus on European banking concerns and the impact of capital reserves on lending. The video concludes with insights into the Fed's policies and the role of capital markets in credit extension.

What is the significance of the Fed's role in the capital deployment of banks?

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What are the implications of banks having too much capital reserve according to the discussion?

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