from Reuters:
The Federal Reserve reduced the size of capital deficits facing several banks before releasing the results of "stress tests" on the financial institutions, according to a story in the Wall Street Journal on Saturday.
The changes came after days of negotiations with the banks, the story said. The Federal Reserve used a different method than analysts and investors had expected to calculate the required capital levels.
and the Wall Street Journal:The Federal Reserve significantly scaled back the size of the capital hole facing some of the nation's biggest banks shortly before concluding its stress tests, following two weeks of intense bargaining.
In addition, according to bank and government officials, the Fed used a different measurement of bank-capital levels than analysts and investors had been expecting, resulting in much smaller capital deficits.
The overall reaction to the stress tests, announced Thursday, has been generally positive. But the haggling between the government and the banks shows the sometimes-tense nature of the negotiations that occurred before the final results were made public.
