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Big U.S. lenders will see if they made the grade this week as the Federal Reserve reports the results of its annual "stress tests."

Despite this past Spring's turmoil in the sector, the institutions are expected to show they have ample capital to weather any fresh trouble.

Although investor payouts are likely to dip slightly, analysts said.

The central bank on Wednesday will release the results of its bank health checks which assess how much capital banks would need to withstand a severe economic downturn.

FED EXPLORING WAYS TO SPEED UP BANK OVERSIGHT, STRENGTHEN STRESS TESTS

Big U.S. lenders will see if they made the grade this week as the Federal Reserve reports the results of its annual “stress tests.” (REUTERS/File Photo)

The results help decide a banks' capital planning, dictating how much cash they can return to shareholders via dividends and share buybacks.

The Fed instituted the annual exercise following the 2007-2009 financial crisis.Ticker Security Last Change Change % C CITIGROUP INC. 46.03 -0.60 -1.29%BAC BANK OF AMERICA CORP. 27.76 -0.19 -0.68%JPM JPMORGAN CHASE & CO. 138.82 -0.76 -0.54%

This year's tests come after the recent banking crisis in which Silicon Valley Bank and two other lenders failed. 

FED WARNS TIGHTER CREDIT CONDITIONS COULD SLOW US GROWTH

The central bank will release the results of its bank health checks on Wednesday, which assesses how much capital banks would need to withstand a severe economic downturn. (Yasin Ozturk/Anadolu Agency via Getty Images / Getty Images)

Wall Street lenders including Citigroup Inc, Bank of America , JPMorgan Chase, Goldman Sachs Group, Wells Fargo, and Morgan Stanley usually attract the most attention. 

Also in focus will be smaller lenders including Capital One, U.S. Bancorp, and Citizens.Ticker Security Last Change Change % GS THE GOLDMAN SACHS GROUP INC. 314.71 -4.88 -1.53%MS MORGAN STANLEY 83.58 -0.92 -1.09%WFC WELLS FARGO & CO. 40.60 -0.45 -1.10%

SVB CUSTOMERS WHO LOST DEPOSITS UNDER PRESSURE TO REPAY LOANS

Banks will be scrutinized a little tougher this year, but analysts and executives expect the 23 lenders being tested will show capital in excess of regulatory minimums.

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Starmer must delicately balance his risky EU reset as UK braces for Trump’s next move on tariffs

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Starmer must delicately balance his risky EU reset as UK braces for Trump's next move on tariffs

As Donald Trump kicks off his threatened trade war by slapping tariffs on both friends and foes alike, Number 10 is preparing for the moment he turns his attention to the UK.

The unpredictability of the returning president, emboldened by a second term, means the prime minister must plan for every possible scenario.

Under normal circumstances, the special relationship might be the basis for special treatment but the early signs suggest, maybe not.

Donald Trump and Keir Starmer.
Pic:Reuters
Image:
Donald Trump and Keir Starmer. Pic: Reuters

It was never going to be an easy ride, with Sir Keir Starmer’s top team racking up years of insults against Trump when they were in opposition.

The bad feeling continued when Peter Mandelson was proposed as the UK’s new ambassador to the US – prompting speculation he might even be vetoed.

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Tariffs against Canada ‘will put US jobs at risk’

Amid all of this, the much-anticipated call between the two leaders seemed slow to take place, although it was cordial when POTUS finally picked up the phone last Sunday, with a trip to Washington to come “soon”.

It is against this slightly tense backdrop that the future of transatlantic trade will be decided, with Westminster braced for the impact of the president’s next move.

So, it’s unsurprising that as he waits, Sir Keir will spend the next few days resetting a different trading relationship – with Europe.

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Sky’s Ed Conway explains Donald Trump’s plan for tariffs

In this area, he is on slightly firmer ground, as the spectre of a global trade war makes European leaders want to huddle closer together to weather the storm.

And conversely, the Labour government’s track record works in their favour here, as they cash in their pro-EU credentials and wipe the slate clean after the bad-tempered Boris Johnson years.

Read more:
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Ursula von der Leyen and  Keir Starmer address the media in Brussels.
Pic: Reuters
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Ursula von der Leyen and Keir Starmer address the media in Brussels in October. Pic: Reuters

It is still, however, an ambitious and risky endeavour to begin the delicate process of removing some of the most obstructive post-Brexit bureaucracy.

For minimal economic benefits on both sides, the UK must convince the Europeans that they are not letting Britain “have its cake and eat it”.

At the same time, Brexiteers back at home will cry betrayal at any hint that the UK is sneaking back into the bloc via the back door.

Donald Trump takes questions as he speaks to reporters.
Pic Reuters
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Pic: Reuters

To make it even trickier, it must all be done with one eye on Washington, because while a united Europe may be necessary in the Trump era, the prime minister will not want to seem like he is picking sides so early on.

As with so many things in politics, it’s a delicate balancing act with the most serious of consequences, for a prime minister who is still to prove himself.

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Sir Keir Starmer to urge EU nations to ‘shoulder more of the burden’ on defence spending

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Sir Keir Starmer to urge EU nations to 'shoulder more of the burden' on defence spending

Sir Keir Starmer will urge European countries to commit more in defence spending as he heads to Brussels for security talks.

The prime minister will call on Europe to “step up and shoulder more of the burden” to fend off the threat posed by Vladimir Putin’s Russia.

Sir Keir, the first prime minister to meet all the leaders of the 27 EU nations in Brussels since Brexit, will argue the bloc needs to capitalise on the weak state of the Russian economy by continuing with its sanctions regime.

The prime minister will meet NATO Secretary General Mark Rutte on Monday afternoon before travelling to meet with the leaders at an informal meeting of the European Council.

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Sir Keir Starmer with Olaf Scholz, the German chancellor, whom he hosted at Chequers on Sunday. Pic: PA

Sir Keir is expected to say: “We need to see all allies stepping up – particularly in Europe.

President Trump has threatened more sanctions on Russia and it’s clear that’s got Putin rattled. We know that he’s worried about the state of the Russian economy.

“I’m here to work with our European partners on keeping up the pressure, targeting the energy revenues and the companies supplying his missile factories to crush Putin’s war machine.

“Because ultimately, alongside our military support, that is what will bring peace closer.”

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Ukrainian soldiers have message for Trump

Sir Keir’s suggestion that EU countries should spend more on defence was criticised by the Conservatives, who have urged the government to increase defence spending to 2.5% of national income.

Shadow defence secretary James Cartlidge said that while “continuing to do everything possible to support Ukraine must remain our top security priority”, it had to accompanied by “urgently increasing defence spending on our own armed forces”.

“Starmer is actually delaying spending 2.5% and, as a result, undermining our ability to rearm at the scale and pace required by the threats we face.”

The prime minister said at the end of last year that he would “set out a path” to lift defence spending to 2.5% of national income in the spring.

The UK says it currently spends around 2.3% of GDP [gross domestic product] on defence.

Britain's Prime Minister Keir Starmer, NATO Secretary General Mark Rutte, and Ukrainian President Volodymyr Zelenskyy  meet at 10 Downing Street in London, Britain, Oct. 10, 2024. Pic: Reuters
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Ukrainian President Volodymyr Zelenskyy, Prime Minister Keir Starmer and NATO Secretary General Mark Rutte at 10 Downing Street in October. Pic: Reuters

Last year EU member states spent an average of 1.9% of EU GDP on defence, according to the European Defence Agency, a 30% increase compared with 2021.

Earlier this week European Council President Antonio Costa said the 23 EU members who belong to NATO are likely to agree to raise the defence spending target above the current 2% of national output at the next NATO summit in June.

Read more:
Starmer must delicately balance his risky EU reset
Builder shortage challenging Labour’s growth plans

However, Donald Trump has repeatedly criticised NATO – the military alliance consisting of 30 European countries and the US and Canada – arguing that his country is contributing too much to the alliance’s budget while Europeans contribute too little.

During the US election campaign, President Trump said America would only help defend NATO members from a future attack by Russia if they met their spending obligations.

He also said members of NATO should be contributing 5% of their GDPs to defence spending – rather than the previous target of 2%.

The session of the Informal European Council comes as the government seeks to reset its relationship with the EU and boost areas of cooperation, including on defence and tackling illegal migration.

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Starmer hosts German chancellor

On Sunday the prime minister hosted German Chancellor Olaf Scholz at his country residence Chequers, where the two leaders agreed on the “importance of scaling up and coordinating defence production across Europe”, Downing Street said.

However, the government has repeatedly said that a closer relationship with the EU will only be sought within its red lines – meaning there will be no return to freedom of movement and rejoining the customs union or single market.

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Migrant crossings: Why are more people crossing the Channel on the weekend?

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Migrant crossings: Why are more people crossing the Channel on the weekend?

More people are crossing the English Channel in small boats on the weekend. Our data analysis shows last year 40% of the total number of arrivals happened on a Saturday or Sunday.

We have been looking into possible reasons why many more people are arriving in small boats on the weekend, and the explanation might not be quite what you expect.

More people are crossing the channel in small boats on the weekend.
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More people are crossing the Channel in small boats on the weekend

Here are a few theories.

French staffing and resources

One suggestion is that French border force, police and coastguard are not working to a consistent level seven days a week.

“Gangs have realised there are lower or less engaged staffing on weekends on the French side,” a former senior Home Office official who worked closely on deals with French tells me.

A former immigration minister said they found it “frustrating” that “we were paying the French but weren’t able to specify operational deployments”.

More on Migrant Crisis

They said it would “not surprise me if the French had fewer people at the weekend and the people smugglers have come to realise that”.

Hundreds of millions have been given by the UK to France to police the Calais coast, most recently almost £500m in 2023.

Another former senior government official with responsibility for borders said the French would be able to demonstrate that “hundreds or thousands of officers are working there” but “strategically it suits France to have the gust with us”.

But when we put this to the French side there was a pushback.

Marc de Fleurian, the Calais MP from Marine Le Pen’s National Rally party, says “blaming the other side of the Channel” is the “easy answer”.

He said it’s “cowardly to say it’s the other side’s fault”.

More people cross the Channel on the weekends than any other day.
Image:
More people cross the Channel on the weekends than any other day

Read more:
UK to introduce ‘world first’ sanctions regime to target smugglers
Can government make bold plan bite?
Starmer’s year to prove he can deliver on small boats

Pierre Henri Dumont, who was the Calais MP from 2017-2024, said: “The reality is you can have as many police officers as you want, but people will cross the Channel. If you have eight rather than 100 police officers that won’t change anything at all.”

A French coastguard source told Sky News there are the same staffing levels at the weekend, he says “any suggestion there is less staffing on the weekends is laughable and an easy thing to say”.

Smuggler planning

Smuggler supply chains might be linked to a specific day for a range of reasons, for example, as one former senior Home Office official suggests, the fact “boat engines, or parts, might arrive on a Friday”.

Mr Dumont says smuggling networks rely on people to do small jobs, like transporting boats, who may also have day jobs in the week. He says the reasons behind the weekend uptick “are not necessarily predictable ones”.

A small inflatable dinghy crossing the English Channel from France to England in August 2024. Pic: Reuters
Image:
A small inflatable dinghy crossing the English Channel from France to England in August 2024. Pic: Reuters

Another factor may be that because French police tend not to intervene once a boat is in the water, many small boats set off from inland waterways. The canal-type waterways which come inland before the Channel are often full of fishing boats on weekdays, making it easier to launch from the waterways on weekends.

Another suggestion from a Home Office source is that while many migrants who cross the channel are based in the camps around Calais, many use public transport to arrive for a timed departure and are therefore reliant on transport timetables which may be more limited at different times of the week.

Weather coincidence

Leaked Home Office analysis shows that of the number of weekend days where small boat crossings were more likely because of good weather conditions was disproportionately high last year.

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The figures show that 61 out of 197 days where the weather meant there was a realistic possibility, likely or highly likely there would be a channel crossing were weekend days. However, we only have figures for 2024, and it seems unlikely the weather alone could account for three years of higher crossings on weekend days.

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