According to the Federal Reserve website, the Dodd-Frank stress tests "are a set of forward-looking exercises conducted both by the Federal Reserve and by financial companies regulated by the Federal Reserve...intended to ensure institutions have sufficient capital to absorb losses and support operations during adverse economic conditions so that they do not pose risks to their communities, other institutions, or the broad economy."
Sounds good. So, what happens when one of the big banks hit hardest by the 2008 financial crisis passes with flying colors?
Citigroup's stock looks tantalizingly cheap. Yet the bank's balance sheet is still in need of more repair, and there's a considerable amount of uncertainty after a shocking management shakeup. Should investors be treading carefully, or jumping on an opportunity to buy? To help figure out whether Citigroup deserves a spot on your Watchlist, I invite you to read our premium research report on the bank today. We'll fill you in on both reasons to buy and reasons to sell Citigroup, and what areas Citigroup investors need to watch going forward. Click here now for instant access to our best expert's take on Citigroup.