Goldman in Spotlight as All 35 Banks Clear First Stress Test Hurdle

The transcript discusses the leverage ratios of Goldman Sachs and Morgan Stanley, highlighting their importance for big banks. It explores the implications of these ratios on dividends and buybacks, with both banks issuing statements to downplay concerns. The discussion also touches on the impact of tax reform on capital and the challenges posed by harsh test scenarios on capital markets. Analysts had expected a drop in dividends and buybacks, but Goldman was more surprised than anticipated.

What was the initial concern regarding Goldman Sachs and Morgan Stanley's leverage ratios?

• They had already failed the tests.

• They were very close to the minimum required levels.

• They were significantly above the required levels.

• They were not affected by the leverage ratios.

What did Goldman Sachs and Morgan Stanley claim about their ability to increase dividends and buybacks?

• They were planning to decrease them.

• They had already increased them.

• They would be able to increase them despite the numbers.

• They would not be able to increase them.

What potential factor was mentioned as impacting capital?

• Interest rate hikes

• Tax reforms

• New banking regulations

• Stock market performance

Why were Goldman Sachs and Morgan Stanley expected to fare poorly in the stress tests?

• They had no exposure to capital markets.

• They had already failed previous tests.

• They were heavily reliant on capital markets.

• They had weak capital markets divisions.

What was the reaction of Goldman Sachs to the analysts' expectations?

• They ignored the expectations.

• They agreed with the analysts.

• They were shocked.

• They were not surprised.