The results of the Fed's stress test are due to be announced today at 4, when investors will get to see just how prepared the big banks are in case of another major economic downturn. In this segment from Thursday's Where the Money Is, Motley Fool banking analyst David Hanson discusses how the stress tests work and the three scenarios that the banks will be tested on, and he also shines some light on the biggest risk for shareholders of a bank that performs poorly in the tests.
Stress tests are also a way for the big banks to prove that they have the ability to pay out higher dividends or initiate a share repurchasing program, without putting shareholders at risk. David discusses whether or not Bank of America (NYSE: BAC ) could raise its famously low dividend after this round of tests, and when investors might see that change.
1 amazing bank not getting stressed out
There's a brand-new company that's revolutionizing banking, and is poised to kill the hated traditional brick-and-mortar banking model. And amazingly, despite its rapid growth, this company is still flying under the radar of Wall Street. For the name and details on this company, click here to access our new special free report.