The Federal Reserve made an error in its stress test of Citigroup that led it to overstate a crucial measurement of losses on the bank’s mortgages, the central bank acknowledged on Friday.
The Fed also issued corrections for Bank of America, Ally Financial, MetLife and Wells Fargo. It said the corrections did not change the capital ratios projected by the stress tests, which estimated the losses that a bank could bear amid situations that include a severe recession and a market meltdown.
The tests, published on Tuesday, calculated how much a bank’s capital would be affected assuming losses on a range of loans and securities over a 27-month period that concludes at the end of 2013.
Still, Citigroup did not do as well as its big-bank peers in some tests. The revisions at Citigroup were for the most part bigger than the amendments at the other financial firms….
http://dealbook.nytimes.com/2012/03/16/fed-acknowledges-error-in-citis-stress-test/
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