The Federal Reserve will give the 19 largest banks a preliminary result of its capital stress test, offering institutions that fail a chance to adjust their dividend and stock buyback policies, Bloomberg News reported on Friday. The change comes after Citigroup Inc. and SunTrust Banks Inc. narrowly missed meeting the 5 percent tier one common equity to risk-weighted assets minimum capital ratio in the 2012 test at 4.9 percent and 4.8 percent respectively. Ally Financial Inc. had a stressed ratio of 2.5 percent in the last test. While the change gives bank boards a second chance, the Fed will also publish the result of their initial capital proposal, showing how far the firms missed in their first attempt. A severe shortfall on the first attempt will generate greater scrutiny of a bank's capital planning process by regulators.
