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 role do macroeconomic assumptions play in the stress tests according to the text?

What concerns were raised regarding the future of stress tests and capital requirements?