but always valuable to speak to gerard cassidy.e driving forward this conversation on banking with a he ismportant guest, definitive on the mid and small sized banks. michaud talk to tom about those banks. as well as jp morgan. this is bloomberg, good morning. ♪ morning, bloomberg cola surveillance, francine lacqua and i have an important interview with the chancellor -- francine lacqua had an important interview with the chancellor of esqecker -- of a checker -- uecker. they is joining us on pandemic and the response in washington. emily i understand you have a congressional bias, but everyone is trying to get through the sunday talk shows. how will the administration manage the message today? emily: it's interesting. the trump administration so far has not done anything big to respond to what we are seeing in the spike in coronavirus cases, top officials say they are not going to repeat the lockdowns that took place in march, if you have been following twitter you can see the down play in the spike of cases, saying that the virus

. >> let's bring in george cass y cassidy. gerard, it's always great to speak with you what is your take on what has come out and can you connect the dots to the after hours actions we're seeing specifically? goldman sachs is down 2.5%, citi group is up by 1.25% and jp morgan is basically flat. >> what i saw today were some definitive numbers on the stress capital buffs. as you know the stress capital buffers is factored into the capital ratios with these banks. only the banks with the exception of goldman, their capital ratio at the beginning of this testing period which are fourth quarter 2019, those capital ratios exceeded the requirement capital ratios goldman missed it by one-tenth of 1%. i don't think it's that big of a deal what's important here is that the banks once again they're going through the stress test now for over ten years the banks are really strong. they have strong balance sheets. the uncertainty comes in with these new scenarios with the kroe covid-19, the sensitivity analysis banks are going to have to resubmit

let's get into wit th with it wh gerard cassidy. great to see you.ou for joining me this morning. >> you're welcome, maria. thank you. maria: so tell me about the stress tests. we've gotten used to the stress tests. the federal reserve came out with the stress test after the big financial upset in 2007. what are you expecting tonight? >> that's right, maria. you're absolutely right. we've been doing stress tests for over 10 years. and essentially they become nonevents, up until this year. and two changes made this year's stress test much more challenging for the banking industry. there's a new measure of capital called the stress capital buffer that is being implemented this year, which will make it more challenging for the industry. but second, maybe more important, the federal reserve has put in a new what they call covid-19 overlay on the economy of. as you well know, the economy has suffered dearly during the pandemic. that's going to be factored into the stress test as well. the combination of those two factors meant this year's stress test whic

we talked about this earlier and yesterday with gerard cassidy, remember.al bank is capping banks' difficul dividends and sg buybacks for the third quarter, aimed at keeping the banking system strong through the covid-19 pandemic. allie what's your take on what took place yesterday in terms of the stress tests, all of the banks are said to be healthy and they should be, they've got enough capital on the balance sheet but of course the dividends and the limitations on buybacks is something to look at. allie: this is a sort of glass half full, glass half empty in a way, depends on how you look at it. the way the market looked at it yesterday was that the majority passed. now, what they were looking for was different scenario analysis, just like all the banks are doing it. there's one thing if we have a v recovery, right. but in the case that we don't, that we have a prolonged l or a u or a w, where does that leave the banks, trying to use the information and the forward prescription that they learned during the financial crisis. so yes, the good news is they