SunTrust CEO Says Stress Tests Improve Capitalization

The video discusses the uncertainty in health care reform and its impact on commerce and investment. It then shifts to bank stress tests, highlighting their role in capital management post-crisis and their limitations in optimizing capital. The discussion also covers strategies for managing capital and increasing shareholder returns, and evaluates the effectiveness of stress tests for banks.

What is one of the main reasons for the uncertainty in the health care sector?

• Ongoing reforms

• Consumer inactivity

• High taxes

• Lack of infrastructure

What was the primary purpose of creating bank stress tests?

• To optimize capital

• To increase consumer spending

• To inject capital into the banking system

• To reduce bank sizes

How have stress tests changed over the years according to the transcript?

• They have reduced capital requirements

• They have improved in quality

• They have become less transparent

• They have become more frequent

What flexibility do banks have after the stress tests?

• Reducing their branch networks

• Altering their capital management strategies

• Changing their business model

• Increasing their workforce

What is a noted limitation of stress tests for non-systemic banks?

• They do not account for market changes

• They are too complex

• They offer diminishing returns

• They are too lenient