, Columnist
The $100 Billion Court Challenge for Goldman and Friends
US banks taking on the Fed and its stress tests could free up plenty of capital.
Banks are used to fending off litigation. Goldman Sachs Group Inc’s most recent annual report includes 14 pages of fine print detailing all the proceedings it faces. But defendant has turned plaintiff. On Christmas Eve, bank trade groups filed suit against the Federal Reserve, arguing that its annual stress-testing process violates the principles of the Administrative Procedure Act.
Banks have complained about regulatory overreach before; now, encouraged by an increasingly friendly legal environment, they’re bringing the issue to the courts.